Define "peak demand" in electricity consumption.

Peak demand refers to the highest level of electricity consumption that occurs at a specific moment or during a defined time period. This concept is crucial for energy management and planning, as utilities and grid operators need to ensure that enough power generation capacity is available to meet these maximum demands. Identifying peak demand helps in resource allocation, infrastructure development, and even in setting electricity prices, as higher demand periods often coincide with increased costs.

For instance, during the hottest parts of the summer, air conditioning usage can cause a significant spike in electricity consumption, marking the peak demand time. Understanding this peak is essential for maintaining the balance of supply and demand on the electrical grid, thus preventing outages and optimizing energy production strategies.