Peak demand in the context of Electrical power

Energy demand management, also known as demand-side management (DSM) or demand-side response (DSR), is the modification of consumer demand for energy through various methods including inducing behavioral changes though education and financial incentives.

Usually, the goal of demand-side management is to encourage the consumer to use less energy during peak hours, or to move the time of energy use to off-peak times such as nighttime and weekends. Peak demand management does not necessarily decrease total energy consumption, but could be expected to reduce the grid congestion periods as well as the need for investments in networks and/or power plants for meeting peak demands. An example is the use of energy storage units to store energy during off-peak hours and discharge them during peak hours.

Peaking power plants, also known as peaker plants, and occasionally just "peakers", are power plants that generally run only when there is a high demand, known as peak demand, for electricity. Because they supply power only occasionally, the power supplied commands a much higher price per kilowatt hour than base load power. Peak load power plants are dispatched in combination with base load power plants, which supply a dependable and consistent amount of electricity, to meet the minimum demand.

Although historically peaking power plants were frequently used in conjunction with coal baseload plants, peaking plants are now used less commonly. Combined cycle gas turbine plants have two or more cycles, the first of which is very similar to a peaking plant, with the second running on the waste heat of the first. That type of plant is often capable of rapidly starting up, albeit at reduced efficiency, and then over some hours transitioning to a more efficient baseload generation mode. Combined cycle plants have similar capital cost per watt to peaking plants, but run for much longer periods, and use less fuel overall, and hence give cheaper electricity.