In most countries, the consumption of power beyond a certain pre-agreed level is charged dearly. This extra cost can be lessened by the consumer if this additional power is covered by his stand-by generator sets that will be called to cover the peaks of consumption.

An Installation for Peak Shaving is practically identical to a stand-by installation with some additional features. In fact many backup installations support peak-shaving which is a built in feature in many of today's advanced gen-set controllers.

There are various ways to implement Peak-Shaving. Some of the common ways are:

1. KW Shaving (the most simple and common way) whereby the gensets are automatically started and used to provide any power that exceeds a given limit that is allowed to be imported from the grid. This operation is easy to implement but inefficient since it often requires multiple starts and stops of the generators as well as an uneconomical running in low power.
2. KWH Shaving (Time Integral) whereby the system monitors the power consumed by the grid over a period of time (eg 15 minutes) and runs the generator at the end of this period to correct the average active and reactive power consumed. In a well tuned system the generators will start once every two - time periods and will run at their most efficient power production levels.
3. Power Pumping whereby the generators are started and operated at full load regardless of the current import levels from the grid. This operation essentially benefits installations for which the power required during start-ups exceeds the grid’s capacity. With this method the installation essentially sums the power provided by its generators with that provided by the grid resulting in more available power during start-ups or for other power hungry operations.

In order to Peak-Shave one needs to run it’s generators in parallel with the grid for extended periods. The design and correct implementation of this capability is not an easy thing and requires special knowledge and experience from the engineers who commission such a system. Moreover, to result in the correct operational scenario(s) which will have the optimal return to the client both in terms of performance and in terms of cost, an analysis of each installation’s power consumptions behaviour needs to be performed.