‘Time-of-use’ pricing periods
‘Time-of-use’ energy pricing can break the day down into three periods.
These times vary around Australia, but in NSW these are the times set by Ausgrid:[1]
Electricity is at its most expensive during the ‘peak’ periods and at its cheapest during ‘off-peak’ periods. If your energy provider offers time-of-use pricing, you should try to shift some of your energy use to when the cost of energy is cheaper.
As an example, it is now standard operating procedure for Linfox to charge the batteries for their electric forklift trucks in off-peak times.
Energy Australia reports that since The Royal Motor Yacht Club in Sydney adopted time-of-use pricing, they have reduced their energy bills by around $60,000 per year.[2]
“Plug-in timers can switch off air conditioners and heaters at the more expensive times of the day. If you’re able to take advantage of time-of-use pricing, what other ways can your company reduce its power use during expensive peak periods?”
If you need help, your energy retailer or EcoSmart Electrician can advise you about the best ways to take financial advantage of time-of-use pricing.
‘Off-peak’ rates
If your company uses a hot water storage tank, are you heating the water overnight in the cheaper, off-peak period?
If you’re not sure, call your energy retailer and take advantage of ‘off-peak’ rates.
Do you pay a peak capacity charge?
If your business uses a lot of energy, you may have to pay a peak capacity charge / maximum demand charge on your bill.
The amount that you pay for your capacity charge is based on the highest level of electricity that you used in peak periods in the previous 12 months or the last month (depending on your network).
For companies that pay it, this charge should be an incentive to minimise the amount of energy that they use at peak times of the day, when energy is most in demand. At this time of day, you need to avoid excessive spikes where you turn on too much equipment all at once – this can lead to bigger capacity charges.
“If you have a capacity charge on your bill, you should consider using the services of an energy consultant to get a better tariff.”
- 1. These are the time-of-use tariffs for Ausgrid in NSW. These times may be different in your local area – check with your energy retailer.
- 2. EnergyCut.info/the-royal-motor-yacht-club