MAXIMUM DEMAND SAVINGS DUE TO ELECTRICITY GENERATED BY SOLAR ENERGY SYSTEM

Definition of Maximum Demand (Defined as “MD” hereinafter)

MD is measured in Kilowatt (kW). It is the highest level of electrical demand monitored in a particular period usually for a
month period. Maximum Demand for any month shall be deemed to be twice the largest number of kilowatt-hours (kWh)
supplied during any consecutive thirty minutes in that month. (Source: https://www.tnb.com.my/commercial-
industrial/maximum-demand/)

Why does TNB Charge for MD?

MD is the peak load imposed by the customer to TNB system at any point of time. TNB needs to cater for this peak load
whenever required by the customer. Since electricity cannot be stored there must be sufficient available generation,
transmission and distribution capacity to meet the highest demand. MD tariffs are structured to reflect the time of day it is
used. For these reasons, most tariffs for larger users are designed to encourage customers to control their electricity
demand at daytime peaks. For example, lower night rate electricity encourages the transfer of daytime usage to the night
period. The MD charge is being practiced by almost all utilities in the world.

MD Calculation
MD is the highest level of electricity demand recorded by TNB meter during a 30-minute interval in a month. The amount
charged to customer is based on the recorded MD in kW multiplied by the respective MD rate. For example, the amount
payable by a Tariff C2 customer registering 100kW of MD for a particular month is RM4,510 (100kW x RM45.10/kW).

Possible Steps to Reduce MD Charges

The following steps would reduce MD charges:
 Practice demand side management such as peak shift i.e. shifting the peak operation/consumption to off peak period
as MD charges are not applicable during off-peak period for customer with peak/off-peak tariff
 Opt for any promotional scheme offered by TNB relating to MD such as Sunday Tariff Rider Scheme (STR)
 Start the motors/equipment in stages or during off-peak period
 Install Solar Energy System especially when peak demand occurs during day time

Sample of MD Profile from Energy Monitoring System

MD Savings Due To Solar Energy System

We have listed 4 case studies that demonstrate the effectiveness of Solar Energy System in reducing MD charges.

Case Study Assumptions:

 1 MWp DC Solar PV System
 At 1.25 DC/AC Ratio, max AC Power is 800 kW
 Company is a manufacturer
 Production is from Mon to Sat
 24 Hours Production on Working Day
 MD is RM38.88 per kW

Case 1: Typical Energy Usage With Reasonably Strong Solar PV Energy Generation

In Case 1, MD usually occurs at 10.30 am at 862 kW. With the Solar Energy System installed, MD drops to 716 KW at 7.00
pm.

The difference in MD before and after installing the Solar Energy System is 146 kW. Hence, the MD savings is 146 kW x
RM38.88 = RM5,676.

Case 2: Typical Energy Usage When Solar PV Energy Generation Differs

In Case 2, MD normally happens at 10.30 am at 862 kW. With the Solar Energy Sytem, MD drops to 722 kW at 4.00 pm.

The reduction in MD before and after installing the Solar Energy System is 140 kW. The savings due to reduced MD is
RM5,443.

Case 3: MD Occurs during Mid-Day

In Case 3, MD typically occurs at 12.30 pm at 900 kW. With Solar Energy System installed, MD is shifted to 8.30 am at 676
kW. The reduction in MD is 224 kW. This works out to be savings of RM8,709.

Case 4: MD Occurs in the Evening

In Case 4, MD normally occurs during the evening i.e. 806 kW at 5.00 pm. Due to low sunlight in the evening, the Solar
Energy System generates minimal electricity. As such, MD after installing the Solar PV System is reduced to 750 kW at 5.00
pm. Nonetheless, MD is still reduced by 56 kW, resulting in savings of RM2,177.