When everyone’s using electricity at once: Understanding peak demand

You might have heard the term “peak demand” before, but what does it actually mean—and why does it matter?

Simply put, peak demand is when electricity use is at its highest. It happens when lots of people are using electricity at the same time, creating periods when more power is needed from the electricity system.

Understanding peak demand can give us a better picture of how electricity is produced, delivered and used across Ontario—and how new technologies and programs are helping make the electricity system more flexible.

What does “peak demand” mean?

Think about a typical summer evening.

It’s hot outside, so air conditioners are running. Dinner is being prepared, lights are coming on, and people may be charging their electric vehicles after getting home from work.

Individually, each household is using a relatively small amount of electricity. But when thousands of homes are doing similar things at the same time, electricity demand can climb quickly.

That’s a peak.

Electricity demand rises and falls throughout the day, driven by the collective usage patterns of customers. The highest-demand periods are known as peak demand periods.

When does peak demand happen?

Peak demand can vary depending on the season, weather and time of day.

In Ontario, periods of high electricity use can occur during hot summer days, when air conditioners and other cooling equipment are working hard. Winter can also bring periods of higher demand as homes and businesses use electricity for heating and other needs.

On a typical day, demand often increases when people are getting ready for the day and again when they return home in the evening. Extreme weather can make these peaks even more pronounced.

Want to see what electricity demand looks like across Ontario? The Independent Electricity System Operator (IESO) tracks Ontario electricity demand in real time and publishes reports showing demand at five-minute intervals. The IESO also forecasts demand to help ensure there is enough electricity available to meet the province’s needs.

Explore Ontario’s real-time electricity demand

Why does peak demand matter?

The electricity system needs to be ready to meet demand whenever customers need power—including during those relatively short periods when electricity use is at its highest.

That means utilities and the broader electricity system need enough generation, transmission and distribution capacity to serve customers during these peaks.

Reducing or shifting electricity use during peak periods can help make better use of the existing system and support a more flexible and reliable electricity grid.

Does peak demand affect my electricity bill?

For most residential customers, your electricity bill isn’t based on your individual peak demand.

If you’re on Ontario’s Regulated Price Plan (RPP), the price you pay for electricity is set by the Ontario Energy Board (OEB). The OEB sets the electricity prices for the three RPP price plans: Time-of-Use (TOU), Ultra-Low Overnight (ULO) and Tiered.

With TOU and ULO pricing, the price you pay depends on when you use electricity. Tiered pricing charges one price for electricity use up to a monthly threshold, with a different price applying to electricity used above that threshold. Eligible residential customers can choose which of these three price plans works best for their household.

Learn more about electricity rate plans.

While your individual peak demand doesn’t determine your residential electricity rate, the timing of electricity use can still matter. Some programs offer incentives for customers who shift or reduce electricity use during periods of high demand.

How can customers help?

You don’t have to turn off everything in your home to make a difference.

Small changes—especially when many customers participate—can help reduce electricity use during periods of peak demand. Depending on your home and the technology you have, that could mean temporarily adjusting your thermostat, delaying EV charging or using energy from a home battery when demand is high.

This is where demand response programs come in.

Demand response programs encourage customers to reduce or shift their electricity use during certain periods when demand is high. Some programs provide reminders or incentives for customers to make changes themselves, while others can automatically adjust connected devices.

Meet GridFlex

Hydro Ottawa’s GridFlex program is one example of demand response in action.

Currently available to eligible customers in select areas of Kanata and Stittsville, GridFlex rewards participants for helping support local electricity reliability during occasional periods of peak demand. The program is focused on these communities in part because of their rapid growth and the opportunity to explore how flexible energy resources can support a growing local electricity system.

Depending on the technology connected to the program, customers can participate by allowing a smart thermostat, electric vehicle or eligible home battery to respond automatically during a GridFlex event—or by receiving a notification and choosing to reduce their electricity use manually.

Participants can earn rewards while helping demonstrate how flexible energy use can support the local electricity grid.

What is the Save on Energy’s Peak Perks Program?

Save on Energy’s Peak Perks Program is another demand response initiative, available to eligible customers across Ontario. The program rewards participants for allowing their smart thermostat to automatically make small adjustments during periods of high electricity demand.

Through demand response programs like GridFlex and Peak Perks, customers can become an active part of the electricity system—not just by using electricity, but by helping manage when they use it.

Every little shift can add up

Peak demand is ultimately about timing. The electricity system has to be ready for those moments when everyone needs more power at once.

By shifting some electricity use, using smart technologies and participating in demand response programs, customers can help reduce pressure during these periods and support a more flexible, reliable electricity system.

So the next time you hear “peak demand,” think of it simply as those times when electricity use reaches its highest point—and an opportunity for all of us to help.