Energy & Sustainability worked example

Peak Demand Reduction Value at 61% persistence of savings: a worked example

This worked example runs the peak demand reduction value numbers for a tougher week than the baseline: 61% persistence of savings instead of the typical 85%. Estimate demand-charge savings from reduced peak kW, demand rate, capture rate, and fixed program value.

The inputs for this scenario

  • Coincident peak kW shaved: 180 kW (held at the documented default)
  • Demand charge rate: 19.25 $ / kW (held at the documented default)
  • Persistence of savings: 61 % (the input this scenario stresses; the baseline uses 85)
  • Demand-response incentive: 0 $ (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: Avoided demand charge = peak demand reduction × demand charge rate × savings realization rate.
  • Peak demand reduction value works out to 2,114 $ at these inputs, and this is the headline figure for the scenario.
  • Value per reduced kW works out to 11.74 $ / kW at these inputs.
  • Avoided demand charge works out to 2,114 $ at these inputs.
  • Program incentive or fixed value works out to 0 $ at these inputs.

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 28.24% below the baseline at 2,114 $.
  • Use it to value peak-shaving, battery, or load-shift projects and to estimate the worth of enrolling load in a demand-response program. A result at this level usually justifies acting on the stressed input before touching anything else, because every other figure in the table is downstream of it.

Results at a glance

  • Peak demand reduction value: 2,114 $ (headline result)
  • Value per reduced kW: 11.74 $ / kW
  • Avoided demand charge: 2,114 $
  • Program incentive or fixed value: 0 $

Run it with your numbers

  • To rerun this with your own numbers, open the live Peak Demand Reduction Value calculator, set persistence of savings to your actual value, and adjust the remaining inputs to match your operation.

Last reviewed 2026-05-12.