What is peak demand?

Peak demand is the highest amount of load placed on a system in a given period, such as the hottest afternoon of the summer or the busiest hour of a day. Systems must be sized for it, even though it happens only briefly. That makes it a major driver of cost, since capacity that is used a few hours a year is still capacity that must be built and paid for.

How it works

Most systems have a load that varies a great deal over time, so the average is far below the peak. The ratio of average load to peak load is called the load factor. A low load factor means expensive capacity sits idle most of the time, and the price for that capacity is spread over few units of use.

Peaks can be tackled from two directions. Supply can be raised with extra plants or stored energy, or the peak can be flattened by moving demand to other times through pricing or controls. A flatter curve lowers the capacity needed, which is usually cheaper than building to meet a sharp peak.

Example

Say a city's grid has an average load of 600 MW but a peak of 1,000 MW on the hottest day. The load factor is 600 / 1,000 = 60%. Meeting the peak requires 1,000 MW of capacity. If a pricing scheme moves 100 MW of the load from the peak to the evening, the new peak is 900 MW, so 100 MW of capacity no longer needs to be built. At an illustrative cost of 1 million per MW, that avoids 100 million of investment.

How to model it in Machinations

Use a Register to create demand over time as a daily pattern with a seasonal swing. A Pool of available capacity feeds a Drain for demand, and a Register records the highest value reached so far. Make a peak shift percentage a Lever, then Play many times with random weather to see the distribution of peaks.