After three years of mild weather and unusually low occupancy, last week’s heatwave across eastern Australia provided a timely reminder that active demand management is essential for containing electricity costs in commercial buildings.

Prior to COVID, it was normal for ‘capacity charges’ to account for about 1/3 of a typical commercial building’s electricity expenditure, even though these charges are based on ‘peak demand’ that might only occur for a few hours (or less) each year.

The key to keeping capacity charges down, therefore, is to anticipate when a building’s electricity demand might be unusually high and to take action ahead of time to minimize ‘spikes’.

If you need a quick primer on peak demand, check out a video we made previously here:


During the week of 18-22 September 2023, the temperature reached 34.6°C (94.3°F) in Sydney, equaling its hottest September day on record and exceeding the average maximum by 14.5°C (26.1°F). While temperatures were well below those being forecast for the upcoming summer — which is still more than two months away — they provided an indication of what is in store, and the benefits from taking an active approach to demand management.

This is illustrated in the following chart from an office building we work with in Sydney. The building’s capacity charge had been based on the peak demand (~174kW) recorded on Monday 20 February, 2023 — a day at the end of last summer where the maximum temperature reached 32°C (89.6°F) with 50% relative humidity (61kJ/kg enthalpy). Contrast this to Monday 18 September, 2023, a day following a warm weekend where the maximum temperature climbed to 34.4°C (93.9°F) with 12% relative humidity (45kJ/kg enthalpy). As can be observed, the building’s peak demand was 43% higher than last summer and the capacity charge has now been ratcheted up to 250kW.

While it is disappointing to see capacity charges being reset so early in the season, operators of buildings receiving Buildings Alive’s Rapid Efficiency Feedback (REF) service have had their first opportunity to test and refine their demand management strategies ahead of the challenging period ahead. To illustrate the significance of last week’s early heatwave, here are a few other observations on what happened across Sydney buildings that Buildings Alive works with:

  • 9% exceeded their Summer 2022/2023 maximum peak demand
  • 71% exceeded their Spring 2022 peak demand
  • 91% experienced peaks within their top 10 over the last 12 months

The opportunities for significant $$ savings by managing peak demand are huge. Buildings Alive works with hundreds of buildings around the world, and a core part of our service is the provision of sophisticated peak demand forecast modelling which warns building operators when their building is likely to breach previous peak demand limits. Our team of expert building systems engineers works with our clients and their contractors to implement control strategies which minimize this peak demand and the resulting charges.

If you would like to save money on peak demand this (southern hemisphere) summer, contact us to discuss how this could work for you.

If you would like to read more about peak demand management, see a few of our previous blog posts below