Energy & Sustainability worked example

Peak Demand Reduction Value at 98% persistence of savings: a worked example

This scenario runs the peak demand reduction value calculation on the strong side: 98% persistence of savings, with every other input held at its documented default. an energy manager needs to value a peak-demand reduction measure

The inputs for this scenario

  • Coincident peak kW shaved: 180 kW (unchanged)
  • Demand charge rate: 19.25 $ / kW (unchanged)
  • Persistence of savings: 98 % (raised for this scenario; the documented default is 85)
  • Demand-response incentive: 0 $ (unchanged)

Working through the calculation

  • Applying the documented formula (Avoided demand charge = peak demand reduction × demand charge rate × savings realization rate) to the inputs above produces each figure below.
  • At this operating point the engine returns 3,396 $ for peak demand reduction value, the number this scenario is built around.
  • At this operating point the engine returns 18.86 $ / kW for value per reduced kw.
  • At this operating point the engine returns 3,396 $ for avoided demand charge.
  • At this operating point the engine returns 0 $ for program incentive or fixed value.

How this compares with the baseline

  • Against the tool's baseline example, where persistence of savings sits at 85% and the headline result is 2,945 $, this scenario comes in 15.29% above the baseline at 3,396 $.
  • Use it to value peak-shaving, battery, or load-shift projects and to estimate the worth of enrolling load in a demand-response program. Treat this as a target state: the delta against the baseline quantifies what the improvement is worth before you commit to chasing it.

Results at a glance

  • Peak demand reduction value: 3,396 $ (headline result)
  • Value per reduced kW: 18.86 $ / kW
  • Avoided demand charge: 3,396 $
  • Program incentive or fixed value: 0 $

Run it with your numbers

  • Every input above is editable in the live Peak Demand Reduction Value calculator, which recalculates instantly and can be shared with the inputs intact.

Last reviewed 2026-05-12.