Power Factor
This guide is for businesses using over 160,000 kilowatt hours (kWh) with a kVA
demand tariff on your bill. If your business is using less than this amount, it is
unlikely that you are being charged for a maximum or peak demand.
Power factor is essentially a measure of how efficiently you are using the electricity
you are being supplied. Certain pieces of equipment and appliances are known to
contribute to poor power factor, including lifts, motors, induction heaters, air
conditioners, refrigerators and dryers. If your business uses a lot of these types of
devices, you may have poor power factor. With power usage, you get charged in
kWh (kilowatt hours). If you have a power factor of one (unity), kilowatt hours will
equal KVA kilovolt amps.
On your electricity bill, you may have noticed a charge for maximum demand
or peak demand. Generally this is measured in kVA (kilovolt amps),
depending on the size of your installation.
Network Issues
Peak demand is a major driver for investment
in network capacity, and hence a major
determinant of total network costs. In plain
English, the network has to provide the
infrastructure just in case everyone pulls their
maximum demand at the same time. If your
power factor is bad, you will pull more current
from the grid, meaning the network has to be
able to withstand this. You are charged for this
as the end user.
Note: It is a requirement of most electricity distributors that all installations maintain a
minimum power factor of 0.9.
Power Factor
Example
In effect, kVA is the energy that is supplied to your business and kWh is the
amount that you actually use. If you pull 100 kVA from the electricity grid and your
power factor is 0.8, you will only get to use 80 kilowatts. The supply authority
charges you for kVA when they are looking at peak / maximum demand.
Effectively, it is 20% of power that you cannot use. Another way to think of it is if
you’re driving a car, it will take a certain amount of energy to travel 1km on a flat
road (unity). It will take a lot more energy to drive 1km up a mountain side (poor
power factor).
Motor Case Study
Let’s consider two motors with the
following characteristics:
Current dissipated in both motors would be
as follows:
Motor 1: 2KW, 230V, Power Factor = 0.7
2kW / (230V*0.7) = 12.4 Amps
Motor 2: 2KW, 230V, PF = 1
2kW/ (230V*1) = 8.69 Amps
From above, it is clear that Motor 1 with poor power factor needs to carry more
current for the same power, though overall power consumption (2KW) is the
same in both cases.
What is a Power Factor Correction Unit?
A power factor correction unit uses capacitors to
balance out the inductive loads at your business
and improve your power factor to 1 (unity). It
assesses the power factor at your business on a
continual basis and brings the required amount of
capacitance online when required. Generally,
power factor correction units are installed on
installations that draw greater than 100 Amps per
phase. It is important to remember that a Power
Factor Correction Unit will not reduce the usage
component on your bill, but will reduce the peak /
maximum demand part of your bill.
Control gear for a Power Factor Correction unit
Power Factor
Power Factor correction is suitable for businesses that:

Have a kVA capacity charge on their bill
 Use more than 160MWh of electricity each year and have a power factor of
less the 0.8

Have a suitable site for installation close to their meter board (around the size
of an average house hold fridge).
What you can do next




Confirm your business is using over 160,000 kilowatt hours with a kVA
demand tariff. If so:
Get a copy of your bill and find out if you’re being charged for maximum
demand or peak demand.
Have a look at your energy monitoring results and find out what your power
factor is. If you don’t have energy monitoring equipment, you can get a friendly
electrician to install monitoring equipment that logs the information. The longer
the monitoring equipment is left connected the better, as the results will be a
better reflection of your overall load.
Depending upon what your power factor is you may wish to install a power
factor correction unit. There are Energy Saving Certificates available from the
NSW state government for installing a power factor correction unit.
For more information about Power Factor Correction, go to the following link.
http://www.essentialenergy.com.au/content/power-factor-correction
For information about the contribution from the NSW State Government via Energy
Saving Certificates, go to the following link.
http://www.ess.nsw.gov.au/Projects_and_equipment/Motors_and_power_factor_corr
ection
This Activity received funding from the Department of Resources, Energy and Tourism as part of the Energy Efficiency Information Grants
Program .The views expressed herein are not necessarily the views of the Commonwealth of Australia, and the Commonwealth does not accept
responsibility for any information or advice contained herein.