{"id":7221,"date":"2025-04-07T10:32:44","date_gmt":"2025-04-07T14:32:44","guid":{"rendered":"https:\/\/volthium.com\/lithium-ess-battery-systems-an-asset-to-reduce-commercial-electricity-bills\/"},"modified":"2025-04-07T10:48:42","modified_gmt":"2025-04-07T14:48:42","slug":"lithium-ess-battery-systems-an-asset-to-reduce-commercial-electricity-bills","status":"publish","type":"post","link":"https:\/\/volthium.com\/en\/lithium-ess-battery-systems-an-asset-to-reduce-commercial-electricity-bills\/","title":{"rendered":"Lithium ESS battery systems: an asset to reduce commercial electricity bills"},"content":{"rendered":"\t\t
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Electrical contractors specializing in energy efficiency are constantly looking for ways to reduce their commercial customers’ electricity bills. One of the emerging levers is the integration of <\/span><\/span>Energy<\/span><\/span> Storage Systems ( <\/span><\/span>ESS)<\/span><\/span>) battery-powered <\/span>LFP. By the way, high-voltage DC battery systems are often better suited for commercial needs <\/span>. <\/span><\/span> <\/span>
<\/span>These high-capacity batteries allow for <\/span><\/span>better management of electrical power<\/span><\/span> called by a building and eliminate unnecessary spikes in demand, resulting in substantial savings on the <\/span><\/span>Hydro-Qu\u00e9bec. How can an ESS reduce the <\/span><\/span>Power Charges<\/span><\/span> charged to business customers? By popularizing the concepts of <\/span><\/span>Peak<\/span> shaving<\/span><\/span> <\/span> <\/span>, <\/span><\/span>real-time power management<\/span><\/span>, and<\/span><\/span> demand anticipation<\/span><\/span>, we’ll see how the battery can smooth consumption, reduce billable peaks, and optimize the cost of electricity for your customers.<\/span><\/span> <\/span><\/p>\n

In response to this rapid growth, new legislation has been put in place to ensure the safety and reliability of electrical installations in Canada.
It is important for both the end user and the professional installer to ensure the quality of the selected batteries. On the one hand, it is possible to ensure the safety of the electrical installations and, on the other hand, to ensure the reliability and profitability of the installation in the long term. <\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Understanding Hydro-Qu\u00e9bec's power charges <\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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To fully understand the interest of <\/span>peak<\/span> shaving, we must first understand how <\/span>Hydro<\/span>Qu\u00e9bec<\/span> bills electricity to business customers.
<\/span><\/span>Unlike residential customers, medium and large power commercial customers are billed on two components: <\/span><\/span>the energy consumed<\/span><\/span> (in kWh) and <\/span><\/span>the peak demand<\/span><\/span> power (in kW). <\/span><\/span> <\/p>\n

In practice, the distributor measures consumption at regular intervals (often every 15 minutes) and records the maximum peak power reached during the month. The latter determines the <\/span><\/span>Application Fee<\/span><\/span> (or power charges) added to the bill.
For example, at the general rate <\/span><\/span>M<\/span><\/span> (medium-power customers), as soon as a customer exceeds <\/span><\/span>50 kW<\/span><\/span> of power demand, each kilowatt of peak power is billed to it, and this <\/span><\/span>from the first kW<\/span><\/span> beyond this threshold<\/span><\/span>. This power cost can represent a significant part of a commercial customer’s bill.
At <\/span><\/span>Rate M<\/span><\/span> in 2025, the power price is approximately <\/span><\/span>$17.57 per kW<\/span><\/span>. <\/span><\/span><\/span><\/span> <\/span><\/span><\/span><\/span><\/p>\n

This means that a customer with a maximum demand for the month reaches, for example, 500 kW will pay <\/span><\/span>about $8,785<\/span><\/span> only as a power charge for the month in question. For the same energy consumption, another company that has limited its peak to 400 kW would see this component reduced to $7,029, or <\/span><\/span>$1,756 in monthly savings<\/span><\/span><\/strong> (more than $21,000 annually)<\/strong> just by controlling its power peak. It is therefore understandable that there is a financial interest in reducing, or even <\/span><\/span>capping<\/span><\/span> peaks in demand.<\/span><\/span> <\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Peak shaving: reducing billable power spikes <\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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<\/span><\/span>Peak<\/span> shaving<\/span><\/span> consists precisely in clipping or flattening these peaks in consumption to prevent them from becoming the “peak of the month” billed at the power tariff. In concrete terms, it is a question of <\/span><\/span>Reduce the amount of energy purchased from the grid during peak demand hours<\/span><\/span>, to reduce peak charges on the bill<\/span><\/span>. <\/span><\/span> <\/p>\n

To achieve this, an ESS (energy storage system) is used, i.e. a battery system as a temporary backup source. In fact, during a peak charge, the battery will <\/span>Discharge<\/span><\/b> and supply some of the electricity needed by the building, which <\/span>reduces the power required from the grid<\/span><\/b>.
Outside peak periods, the battery <\/span>is charged<\/span><\/b> either from the grid (when the building’s demand is lower, or during off-peak hours) or from other local sources if necessary (e.g. solar panels).<\/span> <\/span><\/p>\n

For example, imagine that an office building reaches a peak of 120 kW in the middle of the day (air conditioning, equipment running, etc.). Without a battery, HydroQu\u00e9bec will retain this 120 kW as the maximum power for the month. With a properly sized ESS, it can be decided to limit the contribution from the grid to 100 kW: beyond this value, the battery provides the additional electricity. The peak <\/span>would<\/span><\/b> then increase from 120 kW to 100 kW \u2013 a 17% reduction in peak, resulting in 17% less power costs on the bill for the month in question.<\/span><\/p>\n

The principle of peak shaving is therefore to <\/span>smooth out the customer’s load profile<\/span><\/b> : peaks are “shaved” so that consumption from the grid remains as linear as possible, avoiding costly peaks<\/span>.<\/span><\/p>\n

From the perspective<\/span> of the engineering firm or<\/span> <\/span><\/span>electrical contractor<\/span><\/span>, the implementation of the <\/strong><\/span>peak<\/span><\/strong> Shaving via a battery implies knowing the customer’s consumption profile well<\/strong>. It is necessary to determine the times at which peaks usually occur (for example in the morning when it opens, or around 4 p.m. when certain machines are started simultaneously, etc.), it is also necessary to determine the power reductions targeted (the threshold not to be exceeded). This information will be used to configure the battery management system. <\/span><\/span> <\/span><\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Basic system settings: programming the ESS strategically<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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In an energy storage system<\/em> (ESS), the inverter plays a key role in converting the stored energy in the form of direct current (DC) into alternating current (AC), which can be used by most devices. More than just a converter, the inverter acts as the brain of the system by managing the flow of energy between batteries, the power grid, generation sources (such as solar panels) and loads. In fact, it guarantees stability, synchronization with the network when connected, and can also provide backup power in case of failure. With advanced features like peak shaving<\/em>, load shifting<\/em> , and intelligent load management, the inverter optimizes the overall energy efficiency of the system. <\/p>\n

The <\/span><\/span>Time of Use<\/span> function<\/span><\/strong><\/p>\n

An interesting feature offered by several modern hybrid inverters (when coupled with an ESS battery system) is the management according to <\/span><\/span>the Time of Use<\/span> mode<\/span> (TOU). This function allows you to <\/span><\/span>Schedule charging and discharging periods<\/span><\/span> of the battery according to predefined time ranges. Even though Hydro-Qu\u00e9bec does not yet apply large-scale dynamic rates for its commercial customers (unlike in some international markets), the TOU mode remains relevant. It allows, for example, to <\/span><\/span>force the battery to be recharged during off-peak hours<\/span><\/span> (when the building’s demand is lower) and schedule <\/span><\/span>an automatic discharge during anticipated periods of high consumption<\/span><\/span>. This approach provides greater control over the customer’s load profile, in addition to optimizing the overall performance of the system.<\/span><\/span><\/p>\n

In a future context where variable or incentive rates could become widespread in Quebec<\/span> (we hope),<\/span> the <\/span><\/span>Time of Use<\/span><\/span> mode will become an even more strategic tool to maximize savings. For <\/span>The electrician or the integrator of energy optimization solutions<\/span> is a feature to be prioritized<\/strong> in the choice of <\/span>storage equipment and smart inverters.<\/span><\/span><\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Real-time power management: smoothing consumption throughout the day <\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Once a target power threshold is established (e.g., <\/span>not exceeding 100 kW<\/span><\/b> requested from the grid), the battery system comes into play to manage power <\/span>in real-time<\/span><\/b>.
<\/span>In concrete terms, an EMS (<\/span>Energy Management System<\/span><\/i>) controller continuously monitors the building’s consumption and compares the power demand with the set threshold. <\/span> <\/span><\/p>\n

As soon as demand approaches the threshold<\/span><\/b>, the controller orders the battery to take over to supply part of the demand, so that the power taken from the grid remains below the threshold. Conversely, when the building’s demand is below the threshold, the controller instructs the battery to recharge by absorbing the excess available capacity from the grid. <\/span> <\/span><\/p>\n

This advanced fine control makes it possible to <\/span>erase instantaneous fluctuations<\/span><\/b> of the charge.
For example, starting an engine or compressor could cause a very brief but high power pull. Without active management, a short peak of 5 minutes could be enough to set the maximum power of the month. The ESS battery bank can respond almost instantaneously to this type of consumption surge thanks to modern inverters such as Sol-Ark<\/a> and LuxPowerTek<\/a>, avoiding the grid seeing it and thus excluding this peak from billing. This storage responsiveness is a major asset: it offers a <\/span><\/span> flexibility that other measures (such as manual load shedding) cannot match.<\/span><\/b> <\/span><\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Planning energy to avoid unintentional spikes <\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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It is also important to remember that the battery can be programmed to charge and discharge optimally, depending on the needs of the building. Even though Hydro-Qu\u00e9bec does not apply variable hourly rates for Rate M customers (the price per kWh remains stable during the day, except for certain conditions related to consumption blocks), it remains strategic to recharge the ESS during off-peak periods<\/strong> such as at night, in order to avoid creating a new unintentional peak. Indeed, the charging process is intense in itself. <\/span> <\/span><\/p>\n

With this in mind, several hybrid inverters allow precise time management thanks to the Time of Use function discussed above. They p <\/span>allow charging and discharging time slots to be scheduled in advance, according to a daily or weekly schedule. For example, the battery can be set to charge between 1 a.m. and 6 a.m., and then automatically discharge between 4 p.m. and 8 p.m. to support peak consumption.
This approach ensures greater control over the customer’s power profile while avoiding unplanned calls. In addition, if the site is equipped with solar panels, the surplus energy produced at noon can be stored for targeted use at the end of the day. <\/span><\/p>\n

The integration of the Time of Use mode, combined with intelligent real-time management, makes it possible to optimize both the savings and the overall performance of the ESS system, while preparing the ground for future dynamic pricing in Quebec.<\/span> <\/span><\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Anticipating demand: predicting peaks to better manage them <\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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If real-time reaction is crucial, <\/span><\/span> so is predicting future peaks<\/span><\/span>. <\/span><\/span> <\/p>\n

Indeed, the more you can anticipate a peak, the more you can prepare for it (by charging the battery in advance, for example). Nowadays, energy management systems incorporate algorithms of <\/span><\/span><\/span> <\/span><\/span>Peak<\/span> forecasting<\/span><\/span><\/span>). Such a tool analyzes the customer’s historical consumption data and various factors (time\/day of the week, season, outside temperature, production schedules, etc.) in order to<\/span><\/span>Identify periods when demand is likely to peak<\/span><\/span><\/span>.<\/span><\/span><\/p>\n

By way of illustration, the analysis can reveal that Monday mornings around 9 a.m. and very hot days around 3 p.m. are conducive to peaks. Armed with these forecasts, the ESS system will be able to plan its strategy: make sure the battery is full by 9 a.m. on Monday, or start supplying power a little before 3 p.m. on hot days to prevent the peak from exceeding the threshold.
Some advanced software, using the<\/span>artificial intelligence<\/span><\/b>, now achieve more than 90% accuracy in predicting daily<\/span> peaks<\/span>. By anticipating demand in this way, we improve the efficiency of peak shaving (no “surprises” exceeding the battery capacity) and we can even refine the management to extend the life of the battery (by avoiding unnecessary use of it outside of the real expected peaks).<\/span> <\/span><\/p>\n

In practice, for an integrator of energy solutions, this means that an <\/span>intelligent control system<\/span><\/b> must accompany the inverter. This controller uses forecasts to decide <\/span>When to charge<\/span><\/b> and <\/span>when to unload<\/span><\/b> the SSE proactively. For example, if an unusual peak is expected in the evening due to a special event in the building, the system could keep a battery reserve for that specific time. Anticipation therefore allows for a <\/span>Proactive power management<\/span><\/b> , in addition to real-time reactive action.<\/span><\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Financial benefits and return on investment (ROI) <\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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The primary objective of an ESS battery system in a commercial environment is to <\/span>reduce the electricity bill<\/span><\/b> of your customers. The savings are mainly due to the reduction in the power charges charged by HydroQu\u00e9bec each month. In some buildings, these peak charges can account for 20% or more of the total bill \u2013 so reducing them has a significant impact on operating costs. By clipping the ends, you can often <\/span>Reduce monthly power costs by 10 to 30%,<\/span><\/b> which improves the unit cost of electricity consumed.<\/span> <\/span><\/p>\n

In the medium term, these savings justify the initial investment in the battery. the <\/span>Return on investment<\/span><\/b> of an ESS depends on several factors (system price, size of peaks, current tariff, etc.), but we are seeing more and more projects with relatively short paybacks. For example, case studies have shown payback periods in the range of <\/span>4 to 6 years<\/span><\/b> for well-sized commercial batteries<\/span>. This is due to the combination of substantial monthly savings and the downward trend in the cost of lithium-ion batteries in recent years. Once the investment has been amortized, the savings made each year contribute directly to improving the financial balance sheet of the user company. <\/span><\/span> <\/span><\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Additional benefit: Elimination of power outages<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Indirect benefits must also be considered <\/span><\/span><\/b>. An ESS battery can add value by serving as a <\/span>Breakdown backup<\/span><\/b> (backup power for a few minutes or hours, depending on size, allowing for shorter outages or transition to a generator). It can also improve the quality of the power supply (filtering out sudden voltage variations or providing temporary additional power to avoid too high a current draw on the network). These additional benefits, while difficult to monetize, increase the overall attractiveness of the solution to a business customer, in addition to the purely pricing gains. <\/span> <\/span><\/p>\n

In Quebec, incentive programs can further improve return on investment (ROI). For example, Hydro-Qu\u00e9bec offers a <\/span>Power Demand Management (PDM) option<\/span><\/b> to its business customers, who pay a credit at the end of winter based on the power reductions made during major network peaks. Credits can go up to <\/span>$78 per kW<\/span><\/b> of effective reduction during the winter peak <\/span> \u2013 a battery greatly facilitates this kind of performance by providing the necessary energy during those few critical hours of the year. <\/span> <\/p>\n

By combining classic <\/span>peak<\/span> shaving (savings on each monthly bill) and participation in such programs (additional income in the form of annual credits), the return on investment of an SSE becomes even more attractive.<\/span><\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Synergies with other energy efficiency measures <\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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The integration of a battery system is generally part of a global energy efficiency approach. To maximize the benefits for your customers, it is wise to combine it with other complementary actions or technologies: <\/span> <\/span><\/p>\n