Peak shaving and red-band DUoS: cutting your priciest units

What “peak shaving” actually means

Peak shaving is the practice of using a battery to lower the amount of power your site draws from the grid during the most expensive half-hours of the day. Instead of importing every kilowatt your building needs at 5pm on a winter weekday, you import a steadier base load and let the battery cover the spikes. The grid sees a flatter, lower demand profile, and your bill stops being driven by short, costly peaks.

For a commercial site, the peak is where the real money is. A flat unit price hides the fact that your supplier and network operator charge you far more for power consumed at certain times, and far more for the maximum capacity you reserve. A battery that discharges into those windows attacks both at once.

This is one of the foundations of a stacked business case. Peak shaving rarely pays for a battery on its own, but combined with arbitrage and, where relevant, grid revenue, it is often the single largest line in the model.

Red-band DUoS: the charge most businesses overlook

Distribution Use of System (DUoS) charges are what you pay your regional Distribution Network Operator for moving electricity across the local network. They appear on your bill, usually bundled into your unit rate or itemised if you are on a half-hourly meter, and they are banded by time of day.

The bands are colour-coded:

• Red band is the expensive weekday peak, typically a few hours in the late afternoon and early evening (often around 4pm to 7pm, though exact times vary by DNO region).
• Amber band covers the shoulder daytime periods.
• Green band covers nights and weekends, where the per-unit DUoS cost is a fraction of the red rate.

The gap between red and green is large. Red-band DUoS can be many times the green rate, so every kilowatt-hour you can move out of the red window saves disproportionately. A battery that fully covers your red-band demand, charged earlier on green-band power, removes those units from the most penal part of the tariff.

Why the timing matters

Red-band hours are narrow but predictable. Because they fall at the same time on weekdays, a battery can be scheduled to discharge reliably across them. You are not guessing; you are targeting a known, recurring cost. That predictability is exactly why peak shaving is one of the more dependable value streams in a model, even when grid-revenue streams are uncertain.

Available-capacity (kVA) charges: paying for headroom

Half-hourly metered sites also pay an available-capacity charge, billed per kVA of agreed supply capacity, every month, whether or not you use it. This is the headroom your DNO reserves for you on the network.

There are two ways this hurts:

1. If your agreed capacity is set higher than you need, you pay for kVA you never draw.
2. If your actual demand exceeds your agreed capacity, you incur excess-capacity penalties, which are punitive and can recur month after month until you renegotiate or reduce demand.

A battery helps on both counts. By shaving your peak demand, it lowers the maximum kVA your site ever pulls from the grid. That can let you reduce your agreed capacity, cutting the standing monthly charge, and it removes the spikes that trigger excess-capacity penalties.

The grid-constraint angle

There is a second, strategic benefit here. Because the battery covers peak demand behind the meter, your site can draw more power during peaks than its agreed import capacity would otherwise allow. That means you can add EV chargers, new plant, or extra shifts without applying for a costly DNO reinforcement or a higher agreed capacity. For a constrained site, this can be worth more than the energy savings themselves. We explore that further on our EV charging and storage page.

The peak units themselves: 25-45p/kWh

Beyond DUoS and capacity, the energy itself is priced by time. Peak unit rates on commercial contracts commonly sit in the 25-45p/kWh range, against a much lower overnight or off-peak rate.

A battery lets you charge on cheap off-peak power and discharge during these peak-priced hours, so the units you consume at peak are effectively bought at the off-peak price. This overlaps with energy arbitrage, where the battery is cycled purely to exploit the price spread. The two work together: the same discharge that shaves your red-band DUoS and kVA also displaces 25-45p/kWh units. You can read more on the pure price-spread play on our energy arbitrage page.

Where a site also has solar, the battery stores midday generation for use in the peak, lifting self-consumption from around 55% to 85% or more and reducing how much peak-priced grid power you buy in the first place.

Who benefits most from peak shaving

Peak shaving is not equally valuable for every site. The strongest candidates share a few traits:

• A half-hourly meter, so DUoS and kVA charges are itemised and addressable.
• A spiky load profile, with sharp afternoon or early-evening demand peaks rather than a flat, round-the-clock draw. Manufacturers, cold stores, workshops, retail and hospitality often fit this.
• High agreed capacity or excess-capacity penalties, where reducing peak kVA directly cuts a standing charge.
• Daytime operation overlapping the red band, so the peak you are shaving actually happens while you are running.

A site with a flat 24-hour load and a generous, well-matched agreed capacity will see less from peak shaving and should lean harder on arbitrage and grid revenue. We are honest about this: if the numbers do not stack up for your profile, we will tell you. The right starting point is often the broader peak shaving use-case page.

Sizing a peak-shaving battery: power vs energy

A battery is defined by two figures, and peak shaving depends on getting both right:

• Power (kW) is how fast it can discharge. To shave a peak, the battery must deliver enough kW to cover the gap between your target demand ceiling and your actual peak draw.
• Energy (kWh) is how much it can store. To cover the whole red-band window, it must hold enough kWh to discharge at that power for the full duration of the peak.

The two combine into a duration. A 250 kW / 500 kWh system is a “2-hour” battery: it can deliver 250 kW for two hours before it is empty.

Working it through

Suppose your red band runs for three hours and during it your demand peaks 200 kW above the level you want to cap. You need at least 200 kW of power and enough energy to sustain it: 200 kW over three hours is 600 kWh, before allowing for round-trip losses and a sensible margin.

Get the power too low and the battery cannot flatten the peak fully. Get the energy too low and it runs flat partway through the red band, leaving the tail of the peak unshaved and the kVA spike intact. Peak shaving is unforgiving of undersizing on either axis, which is why we model it from real consumption data rather than rules of thumb.

Modern systems use lithium iron phosphate (LFP) cells for thermal stability and cycle life, with round-trip efficiency of 88-92% and warranties of 6,000-10,000 cycles or 10-15 years. That efficiency loss is why the stored energy needs to exceed the energy you intend to deliver.

What it costs and what it returns

Commercial battery storage runs roughly £200-450 per kWh at commercial scale, falling to £140-240 per kWh for larger containerised systems, with whole projects from around £45,000 for a 100-150 kWh system upwards. Payback typically lands at 4-10 years, achieved by stacking peak shaving with arbitrage and, where the site qualifies, grid-flexibility revenue. Full figures are on our cost page.

Crucially, peak shaving is a saving you control, not a market you depend on. Red-band DUoS, kVA charges and peak units are on your bill today, every weekday, and a correctly sized battery removes a predictable slice of them.

Start with your half-hourly data

Whether peak shaving stacks up comes down to your actual load shape, your DNO region’s red-band rates, and your agreed capacity. We model all three from your half-hourly meter data in a free desk feasibility, with no site visit needed, and tell you honestly whether the numbers work. If they do, you get a fixed-price quote within seven working days. Request your feasibility and we will show you exactly which peaks a battery would shave and what that is worth.