How a Power Factor Correction unit installed in your factory can save your company big dollars!!

If you have received your company electricity bill lately and scratching your head wondering why it costs so much to power your factory or manufacturing plant! Poor Power Factor could be the reason.

In simple terms, power factor is a measurement of how effectively your business uses the electrical power supplied to the site.

A power factor of 1 (or unity) is excellent. A power factor of anywhere between 0.9 and 1 ensures your business is using its energy effectively, however a power factor of below 0.9 may mean a higher than necessary kVA demand. Your business may be using energy ineffectively, resulting in unnecessary expense charged on your electricity bills.

For example, to get 1 kW of real power, if the power factor is unity, 1 kVA of apparent power needs to be transferred (1 kW ÷ 1 = 1 kVA). At low values of power factor, more apparent power needs to be transferred to get the same real power. To get 1 kW of real power at 0.7 power factor, 1.4 kVA of apparent power needs to be transferred (1 kW ÷ 0.7 = 1.4 kVA). This apparent power must be produced and transmitted to the load in the conventional fashion, and is subject to the usual distributed losses in the production and transmission processes.

What are the implications of a low power factor?

·        Various power distribution networks in Victoria charge extra for sites with a poor power factor.

·         Conversely, tariff bonuses are offered to customers able to comply with strict power factor criteria.

·         Low power factor could also lead to stressing of the internal electricity infrastructure. This may cause unnecessary overheating and equipment degeneration.

·         Added cost for new installations because of the need to oversize cables, switchboards and other electrical equipment.

·         Poor power factor can also lead to lower than “normal” voltages within a plant and consequently present unreliable equipment performance.

What benefits can be realised by addressing poor power factor?

·      Allows your business to lower its ongoing energy kVA demand charges, saving you money.

·      Allows your business to optimise the life of its electrical assets and delay or avoid unnecessary electrical system upgrade and replacement costs.

·     Reduces the threat of operational downtime caused by the overloading of your electrical assets within your facility.

· Benefits the environment by conserving resources thus reducing greenhouse gas emissions.

If your power distributor charges you a maximum demand tariff measured in kVA, a power factor correction system will pay itself off in a certain period of time. For example lets assume the power distributor is charging a penalty of $0.148 per day per kVA . A site is operating a 1000kW load at 0.7 power factor, if the site install a power factor correction system and achieves a power factor of 0.9 the site will make considerable saving per year.

1000 kW load at power factor of 0.7 equals 1429 kVA

1000 kW load at power factor of 0.9 equals 1111 kVA

That’s a difference of 318 kVA. That mean the site is drawing an extra 318 kWA from the supplier that it doesn’t need to. The penalty this site is paying is:

318 x $0.148 = $47.06 per day or $17,178.36 per year

“When a customer takes action in order to correct their power factor, SP AusNet will immediately reduce their demand charge to what is expected with the new power factor correction. The savings for the client are substantial and SP AusNet benefits from a more efficient use of the network.” SP AusNet, Electricity Distribution Annual Tariff Report 2010, January 2010

In the case of new installations, mains cable my not have to be upgraded due to the reduced power requirement after Power Factor Distribution Unit are installed, resulting in thousands dollars being saved . For example, if the load power factor were as low as 0.7, the apparent power would be 1.4 times the real power used by the load. Line current in the circuit would also be 1.4 times the current required at 1.0 power factor, so the losses in the circuit would be doubled (since they are proportional to the square of the current). Alternatively all components of the system such as generators, conductors, transformers, and switchgear would be increased in size (and cost) to carry the extra current.

Power Factor correction is an important way for a site to reduce its energy costs and significantly increase electrical switchboard capacity. In order to find out more about the impact of Power Factor correction on your bottom line, talk to Mobile Electrics to organise our technicians   to give you an indication of how much it will cost to install the Power Factor Unit and the initial payback you will save over the years by installing Power factor Correction.