Clear answer, explained.
In most commercial and industrial rate schedules, a significant portion of the bill is tied to peak demand — the highest level of electricity usage during a billing period. In Ontario, this is typically measured over a 15-minute interval and can represent 30–50% of a facility's total electricity costs. Battery storage systems reduce these charges by discharging during peak demand periods, lowering the facility's measured demand and the monthly demand charge that results.
Beyond demand charge reduction, storage can reduce costs through two additional mechanisms. Global Adjustment management: eligible Ontario facilities can lower their contribution to Global Adjustment charges by strategically dispatching during peak grid hours under programs like the Industrial Conservation Initiative (ICI). Energy arbitrage: charging the battery during low-cost periods and discharging during high-cost periods captures the difference in electricity pricing.
Because these strategies are applied continuously across every billing period, the savings are recurring and compound over the life of the system. The financial model for each project quantifies each savings stream — demand reduction, Global Adjustment management, and energy arbitrage — separately, so the total return is built from individual, auditable components.
What this means in practice.
- Peak demand charges in Ontario are measured over 15-minute intervals and can represent 30–50% of total electricity costs
- Battery storage discharges during peak demand periods, lowering measured demand and the resulting monthly charge
- Global Adjustment management: eligible facilities reduce GA contributions by dispatching during peak grid hours under ICI
- Energy arbitrage: charging during low-cost periods and discharging during high-cost periods captures pricing differentials
- All three savings streams are recurring — they apply every billing period across the system's operating life
- Each savings stream is quantified separately in the project financial model for a transparent, auditable return
Best-fit environments.
- Your facility has high peak demand charges representing a significant portion of the electricity bill
- You are a Class A consumer in Ontario and want to understand how storage interacts with Global Adjustment
- Your electricity rate structure includes time-of-use pricing with meaningful peak and off-peak differentials
- You want to understand all the ways battery storage generates financial return before evaluating a project
