The sum of the power ratings of every piece of equipment. Maximum Demand: Total Connected Load × Diversity Factor. How to Calculate Maximum Demand (Step-by-Step)
Demand charges are typically expressed as (or $/kW) per month. For example, in a steel factory with a maximum demand of 1,500 kVA and a demand charge of $75/kVA/annum, the annual demand charge is 1,500 × 75 = $112,500. Many utilities also apply a demand ratchet —a provision that allows the customer to be billed based on the greater of the current month’s peak demand or a fixed percentage (e.g., 80%) of the peak demand during previous months, often the past 12 months. This ratchet discourages customers from having a single month of very high demand because the higher value persists.
Power companies require these calculations to ensure the local grid can support your building’s needs. maximum demand calculation
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). This final figure dictates the minimum rating required for the main incoming service cable and the main circuit breaker. Common Mistakes to Avoid The sum of the power ratings of every piece of equipment
The single greatest advantage of a proper MD calculation is capital expenditure (CAPEX) reduction. By applying diversity factors (e.g., not every power point will draw 10A at 5 PM), you can size a main switch for 400A instead of 800A. In one commercial tower review, an accurate MD saved $47,000 in cable and transformer costs.
Multiply the connected load by a diversity factor (e.g., 66% for domestic lighting) to account for the fact that not all appliances run at once. Aggregate & Phase Balance For example, in a steel factory with a
There are four primary ways to determine the maximum demand of an installation, as specified in standards like AS/NZS 3000 Calculation