Residential users typically pay for energy usage, while some industrial and commercial users pay for both energy consumed and capacity required. Peak demand occurs when consumers in aggregate use the greatest amount of electricity. Over the course of a year, peak demand usually occurs on hot summer afternoons and cold winter evenings. The needed energy can come in the form of steam created by burning coal, oil, or natural gas, or by nuclear fission. Gas turbines and internal combustion engines are also used to drive generators directly.
Hydroelectric plants use moving water to spin generators.
Each of these technologies has different performance characteristics, entails different capital costs, and is characterized by different operation and maintenance costs. Also known as base load facilities, these continually running generators are predominately coal-fired and nuclear plants. It is desirable for base load facilities to utilize the least expensive fuels, although they typically entail the highest capital costs to construct per unit of capacity. During periods when consumers demand more electricity,the power plants that can be quickly fired up to meet the peak load are put into operation.