Explainer
What Is Maximum Demand? A Simple Guide for Business Energy
What it is, how the DNO measures it, and four ways to reduce it without changing what you do.
Part of our business electricity guides
Maximum demand (MD) is the single highest level of electricity your site draws at any point in a measurement period — usually a calendar month, sometimes a year. It’s measured in kW (or sometimes kVA, depending on which charge it’s being applied to). For sites with a half-hourly meter, the DNO records the highest half-hour average across the period and uses that as the maximum demand for that month.
MD drives multiple lines on a commercial electricity bill: the capacity charge from your DNO (based on the maximum kVA seen), the agreed available capacity you’re contracted to, and — for some contract structures — the unit rate you’re quoted. A site that spikes hard during peak hours pays more than one with smoother demand, even at identical annual consumption.
Lowering maximum demand is one of the few levers most business owners haven’t pulled. There are usually four routes: rescheduling discretionary loads off-peak, sequencing big equipment instead of running it together, using on-site storage to flatten peaks, and demand-management software that throttles non-critical loads when you’re approaching a threshold.
How the DNO measures maximum demand
If your site has a half-hourly meter (most do, especially above 100 kW peak), the meter records the kW average for every 30-minute period of the year — that’s 17,520 readings annually. The highest reading in any given month is that month’s maximum demand.
If your site has a maximum demand meter without HH (older installations), there’s a physical pointer that records the highest demand seen, and the meter is read monthly to capture it.
The number is not your highest instantaneous power draw — it’s the highest 30-minute average. A 5-second spike when motors start up doesn’t count. A sustained 30-minute high-load operation absolutely does.
Where MD shows up on your bill
- Capacity charge — usually billed in £ per kVA against your agreed (authorised) kVA in full, however little of it you actually use.
- Exceeded capacity charge — billed in £ per kVA against any portion of your maximum demand that exceeded your agreed capacity. Penalty rate — set by your DNO and often well above the standard capacity rate.
- Unit rate uplift — for fully-fixed contracts, the supplier sometimes builds an MD assumption into the unit rate. A site that exceeds the assumed MD gets a worse renewal next time.
How much MD costs you
| Site peak demand | Typical monthly capacity charge | Annual |
|---|---|---|
| 50 kVA | £10–£25 | £120–£300 |
| 100 kVA | £20–£60 | £240–£720 |
| 200 kVA | £40–£120 | £480–£1,440 |
| 500 kVA | £100–£350 | £1,200–£4,200 |
| 1,000 kVA | £300–£800 | £3,600–£9,600 |
Indicative ranges. Actual rates vary by DNO region and tariff.
Four ways to lower maximum demand
1. Reschedule discretionary loads off peak. Walk through your half-hourly data and identify what’s running in the highest 30-minute period each month. Anything that could happen 4 hours earlier or later? Move it.
2. Sequence high-load machinery. If you have multiple pieces of equipment that can each pull tens of kW, stagger their start times. Two 30 kW chillers starting 5 minutes apart cost the same in energy but show up as 30 kW max demand instead of 60.
3. Add storage. Battery storage charges from the grid in low-demand periods and discharges during peaks. A 50 kWh / 30 kW battery system at a 200 kW site can shave 20–30 kW off recorded peak demand. CapEx £30–60k installed; payback 3–7 years on capacity charges, peak unit rates, and grid services revenue.
4. Demand-management software. Energy management systems can monitor real-time consumption and automatically throttle non-critical loads (HVAC setpoints, secondary refrigeration, EV chargers) when you’re approaching a defined kW threshold. Installed costs £2–10k depending on scale; works well alongside on-site solar or storage.
The interaction with kVA and load factor
Maximum demand, kVA, and load factor are three lenses on the same data:
- Maximum demand = your peak (a single point in time).
- kVA = the capacity the DNO holds open for you (a contracted level).
- Load factor = your average ÷ peak (a measure of how steady you are).
Lowering MD usually pushes load factor up at the same time — fewer extreme peaks means the ratio of average to peak gets healthier. Both effects compound: lower MD reduces capacity charges directly, and the resulting higher load factor improves your unit rate at renewal.
Working with Clearsight
On every HH-metered renewal we analyse maximum demand, agreed capacity, and load factor together — and flag specific actions where the data shows headroom. No upfront fees; we’re paid by the supplier you contract with.
Get a no-obligation business electricity quote in 60 seconds.
Related guides: kVA explained, What is load factor?, Half-hourly electricity meters, Business electricity pillar.
Your questions on this, answered in order
The questions businesses actually ask about this topic, in the order they tend to ask them. Each answer leads to the next; where we can help, there is a link.
We’re installing EV chargers at work, how will it affect our electricity?
Your consumption will rise, and so may your peak demand, which can affect capacity charges and whether your connection is big enough. A single 7kW charger running for a working day uses roughly the same as several homes do daily. Load management, charging times and your contract structure all shape the cost, so it’s worth planning before chargers go in.
Do I need a bigger electricity connection for EV chargers?
Not always. Smart load management can share available capacity across chargers so you stay within your limit. Several rapid chargers, though, may need more capacity from your network operator. An installer should check your existing supply, fuse rating or agreed capacity, and other site loads before you commit to a number of chargers.
How do I find out my site’s available electricity capacity?
Half-hourly sites usually show an agreed supply capacity in kVA on the bill. Smaller sites are limited by the main fuse and cable rating, which an electrician can check. Your half-hourly data shows how close you get to that limit at peak. The network operator can confirm what’s available in the local network if you need an upgrade.
What does upgrading a business connection for EV charging involve?
You or your installer apply to the local network operator with the load you need. They assess the local network and quote for any work, which may include a new cable, cut-out or substation capacity. Costs and timescales vary widely by location, from weeks to many months, so it’s worth getting the application in early in the project.
Can solar or a battery reduce the grid capacity I need for EV charging?
They can help. A battery can supply part of the charging peak so you draw less from the grid, and solar can cover daytime charging when the sun’s out. This can sometimes delay or avoid an upgrade. It depends on your charging pattern and roof space, and any generation or storage needs network approval too.
Can I get a solar and battery survey alongside our EV charging plans?
Clearsight Energy can arrange a commercial assessment that considers your roof, current usage and planned EV load together. Planning them at the same time makes it easier to size the system and the connection sensibly. Share your usage data and charger plans, and we’ll explain the assumptions behind any figures provided. Get in touch →
Are there grants for workplace EV chargers in 2026?
The Workplace Charging Scheme is reported to offer up to £500 per socket from April 2026, for up to 40 sockets across your sites, and to run until 31 March 2027. Businesses, charities and public bodies with off-street parking can apply, with landlord permission if leasing. Check the government page for current terms before you order.
Will EV charging change which electricity contract suits us?
It might. Higher and more variable usage makes accurate forecasting important, especially on contracts with volume tolerances. If most charging happens overnight, a time-of-use structure may suit. If peaks rise, capacity charges matter more. Tell suppliers about planned EV load when quoting, so the price reflects what you’ll actually use.
Can someone quote business electricity with our EV charging plans in mind?
Yes. Clearsight Energy can compare suitable contracts using your current usage plus a realistic estimate for EV charging, so you aren’t caught out by volume terms. Share your MPAN, bills and the number and type of chargers planned. We’ll set out the options, the terms and our fee before you decide. Get in touch →
How should a business charge staff or visitors for EV charging?
Most businesses use the chargepoint’s management software to set a price per kWh, restrict access or offer staff a different rate from visitors. Separate metering of the chargers helps you see the true cost. There can be VAT and benefit-in-kind implications, so take advice from your accountant before setting a policy.
Can someone check the EV charging costs on our electricity bill?
Clearsight Energy’s bill validation can check your invoices after chargers go in, including consumption, capacity and any excess capacity charges. It’s useful for spotting whether your agreed capacity needs adjusting. Send recent bills and your charger usage data, and we’ll set out what we find. Get in touch →