We have defined “Energy Arbitrage” as an economic principle and “Grid-Tie BESS” as a technical platform. So, the technical term used to describe exactly what act What is that strategy execution called? In the energy industry, it has a very specific name: Load Shifting.
This is one of the most basic and valuable applications of a BESS system, a direct manifestation of electricity price arbitrage. This article will clearly define the concept of Load Shifting and its operating mechanism.
1. Definition of Load Shifting
Load Shifting is an energy management application in which a storage system (such as a BESS) is used to change the timing of power consumption from the grid without changing the total final energy consumed by the load.
Simply put, it is action. “shifting” the purchase of electricity from the grid from one time (high price) to another time (low price).
2. BESS Operation Mechanism in Load Shifting Application
This mechanism consists of two distinct phases, controlled by an Energy Management System (EMS) based on a 3-level electricity tariff:
- Phase 1: Charging (Load shifting TO off-peak hours): At night (off-peak hours), instead of just consuming electricity for basic operations, the plant will proactively increase its electricity consumption. This additional electricity is the electricity used to charge the BESS system. In essence, the BESS is “shifting” the energy demand during the day to buy it in advance at a cheap price.
- Phase 2: Discharge (Load shifting AWAY from peak hours): During the day (peak hours), when the plant needs a lot of energy, instead of taking all of it from the grid, the BESS system will release the stored energy to supply the load. From the grid side, the plant's demand seems to have decreased significantly, because a large part of the load has been "shifted" to the BESS.
3. Illustration with Load Diagram
Imagine the load curve of the plant:
- Before BESS: The grid electricity consumption graph will have a deep “trough” at night (off-peak hours) and a very high “peak” during the day (peak hours). The plant has to pay a lot of money for this “peak”.
- After BESS (Apply Load Shifting): The grid power consumption graph will change:
- The night “hollow” is “filled” up (by BESS charging).
- The daytime “peak” is “flattened” (due to BESS discharge). The overall load profile becomes much flatter. The plant has successfully switched from “high-priced” to “low-priced” electricity purchases.
4. Load Shifting vs. Peak Shaving: The Subtle Difference
These two terms are often used interchangeably, but they have a difference in purpose:
- Load Shifting: The main goal is energy cost savings (energy charge – in $/kWh). It focuses on buying low and selling high. It is concerned with total amount energy is transferred.
- Peak Shaving: The main goal is power cost savings (demand charge – in $/kW). It only focuses on “cutting” the top peak power for a short moment (usually 15-30 minutes), regardless of what time it occurs.
In many cases, a BESS system can perform both functions simultaneously. However, understanding that Load Shifting is a fundamental application, focusing on price differences, is central to understanding Energy Arbitrage.
Conclusion: Load Shifting is the technical definition for the practical application of the Energy Arbitrage principle. It is the physical act of charging a battery during off-peak hours and discharging during peak hours. It is one of the most fundamental applications and has the most obvious financial benefits, making BESS a strategic tool for businesses to regain control of their electricity bills.
