Battery Storage
Peak Shaving: Using a Battery to Cut Demand Charges
Demand charges are one of the least understood lines on a commercial power bill, yet they can be one of the biggest. Peak shaving uses a battery to flatten your short-term spikes so the network bills you for a lower peak.
What Demand Charges Actually Are
Most business owners focus on the cents-per-kilowatt-hour rate, but many commercial and industrial tariffs also carry a demand charge. This is billed on your highest rate of power draw over a set interval in the billing period, not on total energy used.
That means a short, sharp spike, a compressor and a chiller kicking in together, for example, can set your demand charge for the whole month. You pay for that peak even if it only lasted a few minutes.
- Energy charges are based on how much you use over time.
- Demand charges are based on your highest short-term power draw.
- One brief spike can lift the demand charge across the entire billing cycle.
How Peak Shaving Works
Peak shaving means using a battery to supply extra power during those short demand spikes, so your draw from the grid stays under a target level. The battery covers the top of the spike while the network only ever sees a flatter, lower peak.
In practice the system watches your site load and discharges the battery the moment demand starts climbing toward your threshold. Once the spike passes, the battery recharges, often when power is cheaper, ready for the next event.
Where AI Energy Arbitrage Fits In
A battery that just sits and waits for peaks is only doing half the job. ATI's differentiator is AI-driven energy arbitrage: the battery charges when power is cheap and discharges or exports when it's dear.
Layered with peak shaving, this means the same asset works two ways. It trims your demand charges during spikes and takes advantage of price swings across the day. The AI decides moment to moment what delivers the best result for your tariff and load profile.
- Discharge to cut demand charges during peaks.
- Charge when energy prices are low.
- Discharge or export when prices are high.
- The system balances all of this automatically.
Is Your Site a Good Candidate?
Peak shaving tends to make the most sense where demand charges are a meaningful part of the bill and where load is spiky rather than flat. Sites with heavy machinery, refrigeration, pumps or equipment that starts in bursts often see the clearest opportunity.
Whether the numbers stack up depends on your tariff, your network area and how your load behaves through the day. There's no single answer, which is why any honest estimate has to start with your actual data.
- Manufacturing and industrial sites with large motors or compressors.
- Cold storage and facilities with heavy refrigeration.
- Workshops and plants with equipment that starts in bursts.
- Any commercial site where demand charges are a large share of the bill.
Getting the Sizing Right
Battery size for peak shaving is a balance. Too small and it can't cover your spikes; too large and you've spent on capacity you rarely use. The right answer comes from your interval data, which shows how often peaks happen, how high they go and how long they last.
ATI runs projects from 6.6kW right through to MW scale with an in-house, CEC and SAA accredited team, no subcontractors. We've delivered commercial installs including a 415kW rooftop at DB Santasalo in Bulli, plus work for Garmin, Goldschmidt, a Hunter Valley vineyard and Kingswood, so we design to how a site actually runs, not a generic template.
The Next Step
Peak shaving can be a genuinely effective way to cut demand charges, but the value depends entirely on your site, your tariff and your load pattern. This isn't financial advice, and real figures only come from looking at your own consumption data.
If demand charges are hurting your bill, a site review is the practical starting point. We'll look at your interval data and tariff and tell you honestly whether a battery, peak shaving and energy arbitrage stack up for your situation.
A battery that discharges during your worst demand spikes can shrink the demand charge that quietly drives up your commercial bill.
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We design, install and deliver commercial solar, battery and AI-driven energy systems Australia-wide — in-house, no subcontractors. A site review models your real load and tariff to show what's actually worth it.
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