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Peak load refers to the maximum possible load on an electrical system. It may refer to the immediate load on a single circuit or to a high sustained load on an electrical power supply or power plant. Peak load also represents the demand for power at a certain time or season.
Electric power generators face peak load demands at those times when the greatest number of people use electricity. An example of this is the late afternoon when the majority of people return home from work and begin using electricity to power appliances, cook, and light their homes. Peak power load also occurs in hot weather because the bulk of air conditioning systems operate on electricity. Peak power load issues are less common in extreme cold weather because heating systems use a variety of fuels such as gas, oil, and wood, as well as electricity.
Electricity cannot be stored in the way that oil or gas can. Electricity must be produced as needed. As a result, electricity producers respond to demand by building facilities to specifically address peak loads.
Power plants producing the bulk of the power requirements for an area on a regular basis are referred to as base load plants. These facilities involve huge capital investments, are built for the long term, and operate on process-intensive but lower cost fuels such as coal and nuclear power. Base load plants are intended to run constantly and produce a steady flow of electricity. These facilities require more time to bring online and to take offline for maintenance and repairs.
Peak load power plants are designed to operate only when the demand exists. They are generally smaller and less efficient than base load plants, and they operate on higher cost fuels such as natural gas. The start-up and shutdown process for these plants is quicker. Small hydroelectric plants can also be used for this purpose because they are also easier to stop and start. Electricity producers have to provide power in response to immediate demand to avoid issues such as brownouts, and peak load generating facilities are a way to meet this demand.
To cover the cost of peak load electricity generation, electricity producers sometimes implement peak load pricing in which businesses are charged at a higher rate for electricity during certain time frames. If large electricity users such as manufacturers can adjust production schedules to run during off-peak times, they can substantially reduce their costs. Some electricity suppliers include residential customers in peak load pricing. In this case, residential users can reduce their bill by shifting the use of appliances such as dryers and dishwashers to off-peak periods and changing thermostat settings to minimize peak hour use.