Peak shaving and load shifting explained

To help optimize energy usage and keep costs in check, homeowners are increasingly turning to smart EV charging solutions. Commonly discussed terms associated with smart EV charging include peak shaving and load shifting. However, there’s often confusion surrounding what these terms really mean, and they’re frequently mistaken for the dynamic load balancing feature.

To clear up any misunderstandings once and for all, this article delves into what these terms signify and what makes them so innovative, without overwhelming you with technical jargon.

Both are energy industry terms

Let’s begin by noting that both peak shaving and load shifting are established concepts within the energy sector, predating the rise of electric mobility and the advent of smart EV chargers.

So, if you search online for information about peak shaving or load shifting, you might end up on a page discussing flexible control strategies used by industries to reduce their energy expenses. While informative, this isn’t quite what you’re looking for.

Nonetheless, the principles and meanings remain valid; it’s just the context and application that differ (and occur on a much smaller scale).

Without bombarding you with technical lingo and confusing abbreviations, let’s simplify these concepts from a relatable perspective: charging your electric car at home intelligently.

What is load shifting?

The easiest way to define this energy management approach is in its name. With “load shifting,” you essentially “shift the load” of energy consumption to another time of day.

To clarify, in the energy industry, electricity usage is often referred to as ‘load,’ and when consumption is high, there’s greater ‘demand’ placed on the electricity grid.

How does load shifting work?

To explain load shifting in its simplest form, imagine turning off equipment during peak demand periods and only using them during less busy times when electricity prices are lower.

For instance—and depending on your utility provider and location—if electricity is cheapest during early mornings and late nights, it’s more economical to charge your car (or run your washing machine) during these ‘off-peak’ hours.

Picture having a smart charging feature that allows you to schedule your charging sessions so you can “shift the load” of charging your car to more cost-effective times. Of course, while charging your car during cheaper hours sounds ideal in theory, reality can be different. You may prefer your car to be fully charged when you need it, so these optimized scheduling times can sometimes clash with your personal routine.

This is where peak shaving comes into play.

What is peak shaving?

Similar to load shifting, in its essence, peak shaving is an energy management strategy.

Whereas load shifting focuses on optimizing energy usage by redistributing it to more favorable time slots, peak shaving aims to prevent demand spikes altogether.

Peak shaving (also known as load shedding) reduces grid load by quickly turning off devices with high energy consumption or—what’s particularly interesting—by incorporating a local energy source to balance out peak demand.

Let’s explore further.

How does peak shaving work?

In the energy industry, the term refers to the practice of using local energy storage (or fossil-fueled generators) to decrease reliance on the grid.

Traditionally, this process was primarily applied by large industrial and commercial power users—not typically by individual households.

However, times are evolving. Today, many households have solar panels installed, and some even possess external battery storage units to store renewable energy generated during the day.

Imagine a smart charging station that combines the use of this stored energy with electricity drawn from the grid while charging your car during peak hours. That’s precisely what the smart EV charging feature peak shaving accomplishes.

Of course, for many, this remains a futuristic concept. But with the advent of vehicle-to-home (V2H) technology becoming more widespread, you could soon leverage your car’s battery as a local storage solution to power your home and shave peaks in your demand.

Difference between load shifting and peak shaving

With load shifting, you move some of the load to a more optimal time when electricity is cheaper, but the overall energy consumption in a day remains unchanged.

With peak shaving, you either eliminate or supplement the use of local energy storage to reduce grid load. Doing so enables you to continue using high-demand equipment simultaneously while keeping costs low.

What about dynamic load balancing?

A related smart charging feature, which is often confused with peak shaving and load shifting, is dynamic load balancing. This smart charging feature automatically distributes available capacity among various appliances and adjusts it based on changes in power load.

Summarized overview

Although distinct, these features complement each other and function well together to help you manage the energy usage of charging your electric car more efficiently. In summary:

• Dynamic load balancing evenly distributes energy usage across different appliances and prevents power outages.
• Load shifting moves energy usage to more optimal time slots to lower your energy bill.
• Peak shaving balances out demand peaks by adding a supplementary energy source during times of highest household demand.

 

If you're keen to learn more about smart charging solutions or want a deeper understanding of energy management in the home, read our comprehensive guide on EV smart charging.