How to Balance Electric Loads with Strategic Energy Storage


Strategic Energy Storage

Facility managers face a constant challenge – balancing electric loads to avoid demand spikes that lead to higher costs. With thoughtful planning and the strategic use of capacitor banks, it is possible to smooth facility loads, avoid peaks, and reduce electricity expenses. This article explains the benefits of capacitor banks and provides a guide to leveraging them for better energy management.


Electricity is a major expense for industrial and commercial facilities, often one of the largest after-personnel costs. While energy efficiency measures can help reduce consumption, managing loads to avoid demand peaks is another part of the equation. Most electricity providers charge higher rates based on peak demand – a facility’s maximum power draw during a billing cycle. A spike in consumption, even for a short period, can significantly inflate the demand charge.

Load management is crucial but difficult to optimize in facilities with variable processes or operations. Producing a steady, even load profile is ideal. This is where capacitor banks come in. These devices strategically placed around a facility help smooth loads by providing reactive power support at key times. This article provides an overview of using capacitor banks to balance facility loads and avoid costly demand spikes.

Capacitor Bank Basics

A capacitor bank is a grouping of individual capacitor units combined to work as a single reactive power resource. Capacitors store energy in an electrostatic field between a pair of conductors. When connected to an AC circuit, they exchange current with the system in an alternating charge and discharge cycle. This interaction provides needed reactive power, measured in volt-amperes reactive (VARs).

Capacitors help stabilize voltage, improve power factors, and reduce line losses associated with inductive loads. They provide reactive power support to offset the reactive demand of motors, transformers, induction furnaces, welding sets, and other inductive equipment. Facility loads with many of these devices can benefit dramatically from capacitor banks.

Capacitor units are combined switchable banks, so reactive power can be applied where and when needed. Banks typically range from 100 kVAR to over 10 MVAR in size. They are placed at key substations, switchboards, or large motor loads. Conductors, switches, protective equipment, and controls allow the banks to be switched on or off as necessary.

Balancing Loads with Capacitor Banks

The main incentive for installing capacitor banks is to avoid demand charges for peak consumption. Electricity providers apply demand charges to a facility’s maximum 15-minute or 30-minute average load throughout a billing period. A single spike in usage can disproportionately inflate this peak demand measurement.

Capacitor banks provide reactive power support when loads would otherwise peak, flattening the profile. Using them effectively requires understanding the facility’s load behavior and patterns. While every site is unique, analyzing meter data can reveal when peak demand will likely occur. This may be particular days, times, seasons, or process schedules.

With this knowledge, capacitors can be switched on to provide extra support before these predictable peaks. For example, on weekdays, capacitor banks may be energized mid-afternoon to handle motor start-ups and air conditioning loads. Or they could be used when large process machinery operates during the second shift. Banks sized to cover 10-20% of the facility’s average load are often adequate for load smoothing.

To optimize the system, capacitors should be placed as close as possible to motor loads. This provides reactive support at the source before line losses can sap voltage. Capacitor switching can be automated based on load monitoring to respond dynamically rather than on fixed schedules. The goal is to provide just enough VARs to flatten peaks without overcompensating, leading to reverse VAR flow.

Case Study: Peak Load Reduction

An industrial packaging plant incurs high demand charges from seasonal equipment start-ups in the summer months. By analyzing their loads, the peaks occurred during the same daily period in summer when chillers, air compressors, and conveyor motors needed to start up.

Three 800 kVAR capacitor banks were installed at the main switchboard to provide reactive power before and during the problem timeframe. This reduced the average peak demand from 21 MW to 19 MW, saving over $100,000 annually in electricity demand charges. The $90,000 investment in the capacitor banks paid for itself in under a year through load smoothing.

Other Capacitor Bank Considerations

Proper equipment selection, installation, and maintenance are needed to realize the benefits of capacitor banks for load management. Capacitors should be specified in kVAR sizes appropriate for the application with voltage, current, and frequency ratings that match the system. Protective devices are critical to isolate faults and prevent damage.

Capacitors can fail over time, leading to blown fuses. Periodic inspections detect signs of deterioration so banks can be serviced proactively. Environmental conditions also impact life expectancy. Capacitors should be kept clean and dry with adequate air circulation. Facilities planning to expand production lines or new loads in the future should account for this in capacitor sizing.


Capacitor banks effectively smooth electric loads and avoid costly demand spikes for industrial and large commercial facilities. Strategically placed near inductive loads, they inject reactive power to stabilize voltage sags during motor start-ups and peak operating periods.

Understanding a facility’s load behavior is key to properly sizing and switching capacitor banks when and where they are needed. The result is a flatter, steadier load profile and reduced peak demand charges. With the proper capacitor bank implementation, facilities can realize significant savings from better load management. The initial investment pays back rapidly in reduced electricity expenses.

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