Bills, meters and consumption
Business energy consumption, demand and capacity explained
What is the difference between consumption, maximum demand and capacity?
Consumption is the quantity of energy used over time, normally measured in kWh. Demand is the rate of use at a point or over an interval, normally expressed in kW. Electrical capacity describes how much power a connection is arranged to accommodate, often expressed in kVA. They answer different questions and should not be substituted for one another.
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What the figures mean
Annual kWh tells you how much energy a site consumed. A demand value shows how quickly electricity was being taken during a particular period. Maximum demand is the highest recorded demand under the relevant measurement basis. Agreed or available capacity is a connection limit, not a prediction of annual use.
A warehouse and an office can consume the same annual kWh while creating very different peaks. Likewise, a site can reserve substantial capacity but use little energy overall.
Why a decision-maker should care
Consumption drives much of the commodity cost and helps size a procurement exercise. Demand shows when operational peaks occur and can reveal opportunities to manage equipment or battery dispatch. Capacity can constrain electrification, new machinery, heat pumps, EV charging or export arrangements, and may carry charges.
Where to find the figures
Find billed kWh on invoices and annual consumption in supplier data. Half-hourly files show interval consumption from which demand patterns can be analysed. Capacity may appear on the bill, connection agreement or network correspondence. Keep the unit, period and source with every figure.
- kWh: quantity consumed or generated over a stated period
- kW: rate of power use or generation
- kVA: apparent power used for connection and capacity arrangements
- Maximum demand: the highest recorded demand under a stated interval or method
- Agreed capacity: the network capacity reserved or contracted for the site
What to ask next
Ask whether the figure is actual, estimated, annualised or modelled; which meter and dates it covers; when the peak occurred; what caused it; and whether current capacity is both sufficient and economical. Do not accept a savings calculation that changes units or mixes annual energy with instantaneous power.
When specialist help may be useful
Technical input is useful before adding major electrical loads, changing capacity, installing generation or storage, or relying on demand reduction in an investment case. The adviser should reconcile meter data, operational assumptions and the network position.
Sources
These sources support the explanation above. Check the linked source for current rules and eligibility.