What is Power Factor: This Overlooked Charge Could Be Costing You Dearly

26 September 2017

What is Power Factor and why is it Important?

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.