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Demand Response & Load Shedding

Load priority tiers · ATS-based shedding · PMS · utility programs

When the system can't carry full load (utility curtailment, generator transfer, scheduled maintenance), shed loads in priority order. ATS-based shedding works for simple cases; PMS handles complex prioritization.

Why Shed Load?

Trigger	What's happening	Action
Utility outage → genset on	Genset capacity may be less than full building load	Shed non-essential to keep gen within rating
Genset failure during outage	Remaining gen capacity insufficient	Cascading shed to match remaining capacity
Utility demand response event	Utility paying customers to reduce demand during peak	Voluntary shed of pre-defined loads for incentive payment
Peak shaving (cost optimization)	Demand charges based on monthly peak kW	Automatic shed during forecast peaks; ESS discharge fills gap
Scheduled maintenance	Switchgear or transformer offline	Pre-shed loads on the affected feeder
Equipment overload	Local feeder approaching capacity	Shed lowest-priority load on that feeder

Load Priority Tiers

Tier	Description	Examples
1 — Life Safety	NEC 700 — never shed	Egress lighting, fire alarm, fire pumps, smoke control
2 — Critical Process	Mission-critical loads	IT (data center), surgical (hospital), refrigeration (food storage)
3 — Important	Significant disruption if dropped	HVAC for occupied spaces, security systems, communication
4 — Optional	Comfort, convenience	Office HVAC, parking lot lighting, EV charging, decorative lighting
5 — Sheddable	First to shed; comfortable to lose	Forecast HVAC pre-cooling, EV charging during peak, water heaters

Implementation — How Shedding Actually Works

Method	Description	Where used
ATS-based shed	Auxiliary contacts on ATS open shedding contactors when on genset position	Simple emergency systems, hospitals, small DCs
PMS (Power Management System)	Centralized controller monitors all loads + sources, dynamically prioritizes	Large DCs, complex industrial, hyperscale
Smart panels / EVEMS	Panel-level controllers shed branch circuits based on programmed priority	Modern commercial, residential demand response
Frequency-based shed	Underfrequency relays (81U) drop loads when genset starts to slow under load	Last-resort shed when other systems fail
Utility load control switches	Utility-installed device that cycles AC compressor or water heater on demand	Residential utility programs (often opt-in for rate discount)

Utility Demand Response Programs

Program	How it works	Customer benefit
Time-of-Use (TOU)	Higher rates during peak hours	Shift consumption to lower-rate periods
Critical Peak Pricing	Even higher rates on critical days (5-15 days/yr)	Major reduction in usage during called events
Direct Load Control	Utility cycles HVAC or water heater during emergencies	Reduced rate; some loss of comfort
Demand Response (DR)	Utility pays for committed reduction during event (1-100 events/yr)	Significant payment for reliable reduction
Real-time pricing	Wholesale market price passed through hourly	Sophisticated customers shed when price spikes
Capacity programs	Customer commits to be available for grid needs (4 hr advance notice)	Annual capacity payment + per-event payment

Worked Example 1 — Atlas DC1 Load Shed Sequence

Example 01 · Atlas DC1 spineUtility loss → genset start → load shed sequence (Side A)

Time sequence

T (sec)	Event	Loads on
T = 0	Utility power lost on Side A	UPS-A1, UPS-A2 ride through on battery. Mech loads off (no switchgear power).
T = 1	ATS-A senses utility loss, signals GEN-A to start	Same — UPS still on battery. Cooling beginning to lose pressure.
T = 10	GEN-A starts and reaches rated voltage + frequency	Same.
T = 12	ATS-A closes to genset position	Side A bus re-energized from gen. UPS rectifiers come back on; battery resting.
T = 13	Load priority controller checks: can GEN-A carry full Side A load? Yes (2,500 kW gen vs 2,300 kW demand). No shed needed normally.	Full load.
T = 13 (alternative)	If GEN-A capacity insufficient: shed CRAH fans (Tier 4) → 240 kW reduction	UPS + chillers + critical loads only.
T = 30	Chiller plant restart sequence begins (CH-1 → CWP-1 → CRAH return)	Cooling restored. IT load uninterrupted throughout.

Why this works: UPS battery ride-through (5 min) + genset (10 sec start) = 30 sec total cooling outage. IT thermal mass tolerates this without shutting down.

Worked Example 2 — Commercial Building Peak Shaving via ESS

Example 02 · Alternate context200,000 sq ft office — peak demand 800 kW · ESS + load shed for cost reduction

Demand profile: Peak 800 kW occurs 2-5 PM weekdays in summer (HVAC plus afternoon office). Off-peak: ~ 250 kW.
Demand charge: $20/kW/mo. Annual demand cost = 800 × $20 × 12 = $192,000.
Strategy: 500 kWh / 250 kW Li-ion ESS + automated load shed.
Discharge profile: ESS discharges 250 kW for 2 hr during peak (3-5 PM) → reduces measured peak from 800 to 550 kW.
Load shed (back-up): If ESS depleted, shed parking lot lighting (50 kW) + half of office HVAC (200 kW) for last 30 min of peak hour.
Savings: Peak reduction 250 kW × $20 × 12 = $60K/yr saved. Plus ESS arbitrages day/night rates: ~$15K/yr. Total: ~$75K/yr. Payback ~ 5-7 yr.

Drill — Quick Self-Check

Work each problem mentally; reveal to check. Goal: reflex, not deliberation.

Drill 1 · Tier 1 loads

What load tier is NEVER shed?

Drill 2 · Why peak shave

Why is reducing peak demand valuable?

Drill 3 · ATS vs PMS

Centralized controller for complex shedding?

Drill 4 · Underfrequency

What ANSI device sheds load when generator slows under load?

Drill 5 · Atlas first to shed

What load class sheds first in Atlas DC1?

Demand Charges — How They Work + Math

Most commercial + industrial utility tariffs include both an ENERGY charge ($/kWh) and a DEMAND charge ($/kW). Demand is what drives peak shaving + load shedding economics.

How Demand Is Measured

Metric	Definition
Demand interval	15-min, 30-min, or hourly window over which average kW is computed
Monthly peak	Highest demand interval value during the billing month
Ratchet clause	Some tariffs lock the billed peak to the highest of the past 11 months — one summer peak charges all year
Demand charge	Monthly peak (kW) × $/kW rate
Time-of-Use (TOU) demand	Different $/kW rates for on-peak vs off-peak hours

Worked Example — Peak Shaving Math

Example · Office buildingDemand reduction via ESS + load shed — annual savings calc

Baseline tariff

Demand rate

$22 / kW / month (on-peak window 12pm-8pm weekdays)

Energy rate

$0.09 / kWh on-peak; $0.05 / kWh off-peak

Ratchet

Billed peak = max(current month, 0.75 × past 11-month peak)

Building peak

800 kW (summer, 3 PM)

Without intervention

Annual demand cost

800 kW × $22 × 12 = $211,200

Annual energy cost

~ $180,000 (varies by usage profile)

Total annual

~ $391,200

With 250 kW × 2-hr ESS

ESS discharge during peak

250 kW for 2 hr → reduces measured peak by 250 kW

New measured peak

800 − 250 = 550 kW

New annual demand cost

550 × $22 × 12 = $145,200

Annual demand savings

$211,200 − $145,200 = $66,000 / year

Plus arbitrage savings (energy)

ESS charges off-peak

250 kW × 2 hr × 365 days × ($0.09 − $0.05) − round-trip losses (15%) = ~ $6,200/yr

ROI

Total annual savings

$66,000 + $6,200 = $72,200 / year

ESS install cost (500 kWh / 250 kW Li-ion)

~ $400,000 (2026 prices)

Simple payback

~ 5.5 years

Why ESS often pencils out for commercial

Demand charges are typically 30-50% of a commercial bill. Even small peak reductions deliver large $/yr savings. Combined with utility incentives (often 30-50% capex rebate) + ITC/MACRS depreciation, real payback can drop to 3-4 years.

If You See THIS, Think THAT

If you see…	Think / use…
"Demand response" / DR program	Utility pays for load reduction during peak. 1-100 events/yr typical.
"Load shedding"	Dropping loads in priority order. Triggered by overload, gen capacity, or utility request.
"Peak shaving"	Reducing peak demand charge via ESS, shed, or generation.
"PMS" (Power Management System)	Centralized controller. Required for complex systems > 2 MW typically.
"Time-of-Use" rate	Different prices throughout the day. Drives arbitrage opportunities.
"Tier 1 load"	Life safety. NEVER shed.
"Underfrequency shedding" (81U)	Last-resort load shed when generator can't keep frequency.
"Direct Load Control"	Utility-installed device for residential AC/water heater. Opt-in.
"Critical Peak Pricing" (CPP)	Utility rate event that may happen 5-15 days/yr. Major price increase.
EVSE on commercial service	Often the biggest sheddable load. EVEMS implements automatic shed.