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Don’t Let Winter Peaks Catch You Off Guard!

In a typical year, the arrival of fall means large electricity users in Ontario (those who are part of Ontario’s Industrial Conservation Initiative/Class A Global Adjustment) breathe a sigh of relief. In a typical year at this time, Ontario’s electricity grid has passed the Five Coincident Peaks which have a big impact on an organization’s Class A Global Adjustment costs. Since the 2012-2013 year, 22 of the past 25 top 5 peak hours have occurred between June and September. Passing these peaks means large customers can forget about peak alerts, curtailment, and other global adjustment-related nuisances.
But 2017 is NOT a typical year.

This year, there is a significant risk of peaks occurring during the winter months, and as early as December. WHY?

The five peaks experienced so far in the 2017-18 ICI period range from 20,457 MW on the low end to a high of 21,786 MW. The cool summer of 2017 means air conditioning use was down, and as a result these peaks are low compared to a typical summer. On two days last winter, demand exceeded the level of some of 2017’s summer peaks. (Dec 15, 2016 saw a high of 20,688 MW, with December 19 being just below that.) If similar demand levels occur this year, they will replace the current bottom two peaks for 2017.

It is important to consider last winter in context. The winter of 2016-2017 was generally milder than the previous two years, suggesting that demand was lower than a typical winter. If colder, more seasonally-normal weather returns, demand is likely to increase compared to last year. This increases the likelihood that two or more of the five 2017 peaks could be displaced. The colder it gets, the higher demand will rise. There is a chance that all of the 2017-18 peaks will occur in the next 3 months.

WHAT DOES THIS MEAN? The occurrence of winter peaks has different significance for different customers. Companies whose peak demand is typically driven by air-conditioning in the summer could benefit from a winter peak. Those who rely heavily on electric lighting or heating, however, could see their demand increase during the peak hours, raising their costs.
For customers whose demand typically peaks in the winter, paying attention is very important. As peak days occur, unwary organizations could see their peak demand factor increase sharply. Even a small 150-kW increase across each of the two new peak hours expected could increase annual global adjustment costs by $35,000. If the kW increase or the number of peaks missed increase, there will be commensurate increases in the following year’s global adjustment costs.

This does not mean that customers whose demand typically peaks in summer just need to sit back and enjoy the savings. Paying attention to the winter peaks and curtailing load during them can enhance the peak savings achieved. Put another way, winter peaks provide an expanded opportunity to lower costs even further.
With the lower threshold for participating in the Industrial Conservation Initiative, there are many companies who are experiencing the peaks for the first time. Given the grid’s history of summer peaking, it is understandable that they might think that the hard part is over. Typically, they’d be right. This year, however, is different. Don’t be caught by surprise; prepare for winter peaks before they happen.

If you are registered in Ontario’s ICI program or are hoping to join it for the 2018-19 period, and you aren’t crystal clear on what this all means, call 360 Energy for support in minimizing your risk. 1-877-431-0332

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