Ever felt ripped off after being served up a beer with more head than you can shake a stick at? Then take a moment to consider how power wastage from your business’ equipment is as useless as the froth on your over-fizzed brew.
But what on earth has power factor got to do with beer I hear you say? And more importantly, what even is it?
Power factor in a nutshell… or a pint glass
Power factor is basically a measure of how efficiently your business sites use power supplied by your network distributor. Poor power factor = poor power efficiency and increased charges.
But for a more detailed, um, ‘scientific’ explanation, let’s get back to that beer:
Beer = active power (kW) – the useful power, or the liquid beer is the energy doing the good work.
Foam = reactive power (kVAR). This is wasted or lost power. It’s the energy being produced that isn’t doing any work and is annoyingly inefficient.
The mug = apparent power (kVA). This is the demand power, or the power being delivered by the utility.
So, the more ‘foam’ on your power factor, the more power wastage and the higher your inefficiency. Poor power factor is bad news for your business, your carbon footprint, and the environment.
Power factor is expressed as a percentage – the lower the percentage, the less efficient your power usage.
For example, equipment with a power factor of 1 is using all the power supplied to it. Big tick. Generally, a power factor of 0.8 or above is considered good.
However, if your power factor is lower than 0.8, it should be corrected to save on consumption and comply with the requirements of the electricity network operator.
Paying hand over fist for power
Total Utilities Director Chris Hargreaves explains, “Your power supplier provides electricity to meet your demands. Therefore, if your apparent power needs are high in order to compensate for poor power factor, you – the customer – will end up paying through the nose for it.
“For some larger customers, power suppliers might even take the largest peak and apply it across the full billing period. So you’re paying a very high price indeed for that froth on your beer!
“Poor power factor can also cost your business through direct penalty charges applied by many electricity distributors in New Zealand. This combined with charges for apparent rather than actual power can result in sky-high utility bills – particularly in this current climate where the cost of power is going through the roof.
“Conversely, by reducing the amount of energy your site requires at any one time, you reduce demand and the cost of supplying energy to your site.”
So, how do I get a handle on my business’ power factor?
Before you start to tackle a power factor problem, it’s important to get a measure of how efficient your current equipment actually is.
Total Utilities provides power factor audits – complete health checks of the overall quality of your electrical network. Our power factor audits identify problem areas and suggest opportunities for improvement in order to maximise your energy savings, mitigate faults and increase system reliability and efficiency.
Total Utilities can save you money with power factor correction
If a problem is identified during our audit, installing power factor correction is a great option to reduce your demand charges.
Total Utilities works with Rotorua based power factor correction specialists KVAr Correct, to provide complete, custom, and ready-to-go power factor correction solutions, plus ongoing monitoring and maintenance. These modular systems are custom designed to meet each customer’s need, ensuring the best return and no wasted capacity.
So, if you’re looking to reduce costs and increase energy efficiency (and let’s face it, who isn’t?), maybe now’s the time to look into your power factor? Use less. Pay less. Reduce your carbon footprint.
It’s a win-win for your business, your bottom line and the planet.
Contact Total Utilities to find out more about our power factor audits, services and solutions.
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Total Utilities has assisted many clients in making long term immediate savings by identifying power factor issues and providing turnkey services to rectify the problem.
In the electrical industry, Power Factor is widely known as a bit of a dark art. Over the last few years, advances in technology have brought new types of correction systems to the market along with a range of off the shelf cheap products that can be ordered online and promise the world but deliver little.
The below paper was written by Allan Ramson (NZCE, BEng, MBT), General Manager of kVArCorrect Ltd and provides an insight into the pros an cons of active versus passive power factor correction for different applications. For a full copy of this paper please click here.
History of Static VAr Generators (SVG) Technology in New Zealand
Metalect Industries combined with the Engineering School at Canterbury University to fund and direct research into Active Systems for 3 phase applications in 1996-1998. This culminated in publication of a PhD thesis by Edward Arnold Memelink in 1999. From there, single phase prototypes were built and tested. Metalect Industries and a technical team from Canterbury then extended the design to 3 phase, obtained government research grants, and units were built and site tested, notably on the Queenstown Gondolas. Whilst successful in electrical terms, the systems could not be economically manufactured due to component limitations of the time and by 2006, the projects were abandoned. Several related products were spun off as ongoing products for Metalect Industries and several of the ZVX units (Zero Crossing By-Pass units) have been installed in many sites around New Zealand.
Conventional Capacitor Based Power Factor Systems
Benefits
Proven technology when correctly designed
Larger switchboard builders and specialist companies know what they are doing
Utilises available switchgear
Contactors, MCB’s, fuses
Simple to maintain
Ensure air flow as designed, capacitor current within specifications, temperature within specification
Simple to repair
Replace contactors, capacitors, MCB’s, fuses, etc. All done by any Electrician without system shutdown (if designed correctly)
Low cost test equipment
Current meter, temperature measurement. Capacitance meter not required (if the current is correct, so is the capacitance)
Easily expanded
Add more capacitance in very small lumps as site grows
Reliable
Capacitor failure does not take whole system offline. Saves customer money in penalties by continuing to partially operate
Deficits
Cannot control leading power factor
There are very few sites where this is required.
Can be slow to react (but not always)
Often not required. However, there are capacitor-based systems that are specifically designed to response sub-second
Old capacitors may be prone to leaking
Modern capacitors are optionally fire-retardant resin filled.
Generate significant heat
True, but active systems generate even more. If the available cooling cannot handle a capacitor system, it absolutely cannot cool an active system
Can produce system resonance issues
This is so rare; we have only ever documented one case in NZ (but can be easily fixed)
Considered to be Old Fashioned
A matter of image only
Risk of fire in the event of capacitor failure
Modern capacitors, combined with correct design, completely mitigate this.
Active Power Factor Systems (SVGs)
Benefits
Fast and accurate correction of power factor (leading or lagging)
When working as designed, there is no doubt that the power factor correction delivered is excellent
Often physically smaller than capacitor systems
Wall mount options are lower cost than the rack mounted large SVGs
More reliable than poorly designed conventional systems
Certainly not true for properly designed capacitor-based systems
Deficits
Higher cost of installation than conventional capacitor-based systems
Made up of unit purchase price plus 3 x CT’s (and may require air conditioning.) Even without air conditioning in the switch room, the cost of SVGs is higher
Expensive to expand because the units come in big lumps. EG: if the system is 5kVAr short of achieving target, minimum step is 30kVAr at >$5-7k installed
Contrast a capacitor-based system where an extra 5kVAr may be a few hundred dollars only
All the eggs are in one basket, causing potential large penalty tariffs to the user
If the unit has a fault and goes ‘off- line’ all power factor correction is unavailable. If a capacitor fails in a conventional system, then the rest can continue
Generates almost twice the heat as a capacitor-based system and is specified for lower ambient temperatures to start with.
Capacitor based systems have a higher ambient temperature specification. This is critical in non-air conditioned rooms over summer months
Usually very high MTTR (mean time to repair) times – recommend 100% complete spare system backup to avoid 0% power factor control to the site (maximum exposure to penalties)
When the whole system is offline, the full penalty tariffs will be incurred by the end user. One way around this is to use multiple 30kVAr units rather than a single larger unit, although this is a huge cost disadvantage
Units have more capacitance internally than conventional systems. Worse, these capacitors are electrolytic type with corrosive acids inside
True, and the lifetime of electrolytics is known to be significantly less than high quality MPP caps as used in capacitive type power factor systems. See kVArCorrect’s papers on Design Problems in Power Electronics
More susceptible to dusty and humid environment compared to capacitor-based systems
Modern capacitor-based systems can fail too, but the MTTR is significantly lower and can be fixed by local electricians without ‘return to base’ or very specific skill sets
A Combination of the two Technologies – THE HYBRID SYSTEM
Potentially, a Hybrid system that combines the two technologies can mitigate the cons of both technologies whilst accentuating the pros. The scenario would be, for a 100kVAr requirement, to provide 70kVAr of capacitor based modules with a 30kVAr SVG. In every case where the author has investigated the case for control of leading power factor, it has been found that the amount of leading kVAr required is less than 30% of the total requirement. For example, we’ve documented sites with 20-50kVAr leading at certain times and 200-300kVAr lagging at other times. This Hybrid system is undoubtedly more cost effective than a full 300kVAr of SVG, in addition to not having all of the negative points shown in the tables above. The system will produce far less heat and will not be completely off-line due to an SVG electronic malfunction, as there would be significant capacity in the capacitor based section of the system to avoid the bulk of penalties.
Summary
The comparative pros and cons of the three technologies are summarised in the following table – the third column relates to kVArCorrect’s Hybrid system, which was developed specifically to overcome the limitations of both capacitor-based systems and active systems. It uses a traditional capacitor-based approach for bulk power factor correction, with a smaller active system to handle high speed as well as leading power factor requirements. The Hybrid system is designed to have the best of both technologies whilst offering superior reliability.
While fully active systems can provide exact kVAr requirements for both leading and lagging power factor in near- to real time, they can be extremely expensive, and are normally return-to-base in the event of electronics failure. Clients are often shocked to discover the cost of expanding a fully active system could be as high as the original installation.
Hybrid systems only rely on the active electronics for less than 25% of the overall available corrective kVAr’s, meaning 75% or more of the power factor correction is still available to mitigate the potential penalties, should the electronics require repair or servicing. Hybrid systems combine the speed and control benefits of a fully active system, with the maintainability and reliability of a capacitor-based system.
About the author
Allan Ramson is the owner of kVArCorrect Limited and has worked extensively in the Australasian Power Factor market for over ten years. Allan and other engineers at kVArCorrect are ex-employees of Ampcontrol and Metalect Industries in Rotorua, and have been involved with Active System technology in New Zealand for many years.
Also having been closely associated with few hundreds of power factor correction systems installed, it is with significant experience in the market that this document has been written. kVArCorrect designs and manufactures capacitor based power factor systems, Hybrid Capacitor/SVG systems, a range of power quality controllers, and SVG add-ons. Additionally, kVArCorrect sells SVG systems in 30kVAr, 50kVAr, 100kVAr and above sizes.
I joined the energy industry 11 years ago this week, the time has flown by and a lot has changed since 2007. Technology has been the driving force and is currently revolutionising the energy market. While the fundamental mechanics remain similar, the way in which pricing is determined for end users (customer) has evolved rapidly and the future only suggests more change with Solar and other distributed generation becoming more cost-effective, battery storage, electric vehicles, blockchain peer to peer energy trading through to the potential of multiple retailers supplying energy to a single ICP connection.
The Mysterious Case of the Power Factor
Power Factor remains somewhat like a dark art in the industry, it’s a small charge often hidden on one line of your power bill, there is no graphical data on the bill that tells you about it and it often sneaks past the accounts payable or finance team as they just see the whole invoice cost and when it is due. Energy Retailers typically know very little about it if questioned, the common line is that “it’s a pass-through charge that we don’t control, you need to talk to your network.” Which is usually met with, “you need to talk to your energy retailer” from the network.
For the basics on power factor, my article What is Power Factor is recommended reading.
Power Factor Pricing
Some distribution companies (local area electricity network owners), mostly in the North Island, have been charging large commercial and industrial customers reactive energy charges for some time. These networks have typically centred around the central North Island, Hawkes Bay, Bay of Plenty, Waikato and Auckland. While the networks do apply this charge differently, typically it averages out to be $7 per reactive kilo-volt amp per month ($7/kVAr/mth). In addition to this, some networks charge a peak kVA demand charge as well and if power factor is low during peak demand intervals customers are hit with a double whammy as a poor power factor inflates the kVA reading.
In the last couple of years, there has been quite a bit of discussion within the market from distribution companies about the way in which they price and how they will maintain large network infrastructure in a distributed generation environment. For the most part, the bulk of all electricity customers pay a cents per kWh charge to distribution companies as a way for them to recoup the cost of maintaining the network. This pricing structure is simple, which meets the requirements of residential and small business customers as it is easy to invoice and easy to understand. However, this way of charging was designed before smart metering, before the digital revolution even. The smart meter rollout across the country is by and large complete, which opens the door to time of use pricing in order to try and drive better usage behaviour from customers.
Benefits of Demand-Based Pricing
While time of use capacity and demand-based pricing has been a staple of some distribution companies for large commercial and industrial customers, it is likely that we will see this type of pricing extend to medium and small commercial customers in the future. This type of charging will assist the network operators to ensure the security of supply as more customers install solar panels and batteries throughout the grid, reducing the amount of volume (and revenue generated from variable usage charges) being transmitted throughout local area electricity networks.
We are already seeing this happen as PowerCo Western (New Plymouth) has introduced a nominal power factor charge for small/medium time of use metered customers in the last couple of years. This mirrors the way in which Vector (Auckland) re-introduced power factor charging in 2010, pricing was gradually increased over a period of 3 years allowing time for customers to see the power factor charges appearing on their invoices and make steps to rectify the issue. WEL Networks (Hamilton) recently introduced nominated capacity charges for low voltage customers where customers are required to set their expected capacity requirements, like the gas industry’s maximum daily quantity, if the customer demand exceeds the nominated capacity then expensive excess demand charges apply. WEL also recently changed from charging peak kW demand to peak kVA demand, further underlining to customers that they need to keep tabs on their power factor or face paying more on the monthly power bill than they need to.
Power Factor Doesn’t Have to be Mysterious
In large measure, power factor is a relatively simple fix if you know who to talk to about it. It can be one of those easy savings made without having to change behaviours, train staff or make a structural change to the way in which you do business. There are other benefits too, such as increasing the effectiveness of energy requirements and negating the need to upgrade supply if you are short on capacity. It can also improve the lifespan of sensitive computer-controlled equipment and improve harmonics. While it can seem like a bit of wizardry is required to rectify power factor issues, those in the know don’t need a magic wand, it’s pure science.
Power Factor is an electrical term that is the measurement of how efficient energy consuming equipment translate that energy into a useful output. It is measured by the ratio (>0 and <1) between apparent power (kVA) and real power (kW), where apparent power is the amount of energy required to deliver a required output. Power Factor should be as close to 1 as possible (above 0.95) so that apparent power and real power are nearly the same. This means that nearly all the energy consumed is translated into a useful output.
An analogy of this is a boat travelling in a straight line from Beachlands Marina to Waiheke, with no wind and water currents it can easily make the trip without difficulty (real power), however in the real world, environmental factors exist which, if not allowed for, will make the boat travel off course or get to its destination much slower. The boat requires more energy (apparent power) to counteract the wind and ocean currents to arrive safely at its destination in its desired timescale. With stronger wind and currents, more energy is required to make the same trip and perform the same action.
In an ideal world, the boat would only travel on calm sunny days as this would maximize the energy output in travelling to Waiheke Island.
This Overlooked Charge on Your Energy Bill Could be Costing You Dearly
Returning to buildings, manufacturing plants and industrial sites, power factor is caused by inductive energy loads, these are the wind and ocean currents that can potentially mean that we use more energy than is necessary to run our equipment. Inductive loads include:
Transformers
Induction motors
Induction generators (wind mill generators)
High intensity discharge (HID) lighting
Sites with poor power factor (a low ratio of below 0.95) create disturbance in the local electricity distribution network which can require the network operators to build more infrastructure than is required to deliver power to customers.
Power Factor Charges
We regularly come across customers who are not aware they are being billed for poor power factor, in most cases the energy retailers are not concerned about these charges as they are pass-through network costs. Most North Island and some South Island energy distribution networks charge customers with poor power factor. Pricing is mostly standardised through the country at around $8.90 per reactive kVA unit per month, however penalty times and the way the billable Power Factor is calculated varies between networks.
An example of this is below, covering a customer located in the Vector Network in Auckland.
This is an extreme case, however shows what customers should look out for on their energy bills. If poor power factor is charged, along with a peak kVA demand charge, then customers are paying a higher cost for peak demand as poor power factor inflates this. Like the analogy above, a greater amount of kVA energy is needed to get to Waiheke due to strong winds and ocean currents.
What can be done to correct Power Factor?
Power Factor can be corrected through the installation of capacitor banks, traditionally these consisted of a control unit and a series of capacitors that would filter the power used on site as required. Modern units are evolving quickly as technology advances where sophisticated software can deliver granular correction with less capacitors to ensure that power factor remains above 0.95. Fully active systems delivering electronic real time correction are also becoming more accessible but remain very expensive and only suitable for specific situations. Hybrid systems are also available, but again, these are suited to specific situations.
There are numerous businesses out there offering power factor correction, many companies only offer off the shelf type products. The danger here is that they are not specifically designed to a customers requirements and can be either under sized (i.e. they wont correct all of the power factor issue) or their over sized (i.e. a customer will pay for more than what they need). Standard step sizing of the capacitor banks may be too large which means correction only works at large loading as the unit lacks the granularity to correct smaller loadings.
What if I have a unit already installed?
Depending on the age and design, most units can be repaired or upgraded. However older units may need to be replaced as it would be a case of just throwing good money after bad.
Unfortunately Power Factor Correction Units are not a set and forget product, just like a car they need a regular annual inspection. Having your unit checked on an annual basis is a good way to make sure that they continue to run efficiently and you get 100% value out of an expensive asset. All too often we hear of customers say, “but I installed a unit 3 years ago, why am I still being charged for power factor?”
If the unit was designed correctly in the first instance and the customer has not outgrown it, the most likely issue is heat. Capacitors have a life cycle of around 10 years if kept cool. However if they are regularly exposed to temperatures above 30 degrees they can begin to fail. This is why unit design is important and relates to the location of where the unit is installed. Off the shelf products will not consider this.
Who do I call?
Total Utilities can assist customers in building the business case to install or repair correction equipment, illustrating potential savings and relative return on investment based on measured half hour interval data.
We can design and install Power Factor Correction Units through kAVrCorrect (Formerly Metelect in Rotorua) so that customers receive and full end to end service.
