What is Maximum Demand and How Can It Affect Your TNB Electricity Bill?

If you’re a business owner in Malaysia, understanding your electricity bill is crucial to controlling costs. One of the key factors affecting commercial and industrial electricity bills is called Maximum Demand (MD). But what exactly is MD, and why does Tenaga Nasional Berhad (TNB) charge you for it?

What is Maximum Demand?

Maximum Demand is the highest amount of electrical power your business draws from TNB during any 30-minute period within peak hours in a month. TNB measures how much electricity you use not just by total energy consumed (in kilowatt-hours, kWh), but also by the demand at any point in time (in kilowatts, kW).

Think of it this way: Even if your total usage is reasonable, a sudden spike in power use — like starting many machines at once — can cause a peak demand that costs you more.

Why Does Maximum Demand Matter?

TNB needs to ensure the power system can supply your highest demand at all times. This means investing in enough infrastructure like generators, transformers, and transmission lines to handle that peak load — even if it only happens briefly.

To recover these costs, TNB charges businesses based on their MD during peak times, usually from 2 PM to 10 PM on weekdays. So, if your business has a high spike in demand during those hours, you'll pay a higher capacity charge (RM per kW).

How Maximum Demand Is Calculated

TNB measures your electricity use in 30-minute intervals during peak periods. The highest 30-minute demand reading each month is your MD. For example, if during one 30-minute period you consumed 1,000 kWh, your demand is 1,000÷0.5=2,000kW1,000÷0.5=2,000kW.

How to Reduce Maximum Demand Charges

There are simple ways to reduce your MD charges:

• Stagger equipment startups instead of turning everything on at once.

• Shift non-urgent operations to off-peak hours when demand charges don’t apply.

• Utilize peak shaving technologies such as battery energy storage to smooth out sudden spikes.

• Monitor your usage to identify demand peaks and better manage your consumption.

Why This Matters for Your Business

MD charges can make up a big portion of your electricity bill, especially for larger facilities. For medium voltage customers, capacity charges can be upwards of RM40 per kW monthly, so even a small reduction in your peak load can save you thousands a year.

By understanding Maximum Demand and using proven management techniques, your business can control costs more effectively and improve profitability.