E L E C T R I C A L E N E R G Y M A N A G E M E N T G U I D E L I N E S S E R I E S NO.

1 0 2

Improving Load Factor and

Power Factor to Reduce Demand
EmgyS e m
for Business and Industry

Potential Savings for Heavy Users of Electricity

Commercial, industrial, and
institutional establishments
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that pay demand charges, I

\
AVERAGE COST
that use relatively large 14 - I PER KWH AT
amounts of electricity, or \ VARIOUS LOAD FACTORS
that have electrically- I
powered systems with 13- I
I
potential for power factor I
problems may be able to I
12. \
reduce demand charges by I
improving load factor and 1
\
power factor. 11. \
I
The amount of power \
\
required to operate energy- 10 \
using fixtures and equipment ENERGY \
\
is measured in terms of COST \ 1.58g
kilowatt (kW) demand. The KWH 9 \
kW demand charge is the \ SAVINGSIKW H
charge for the highest power
(#I \
\ OR e----..
8 \ I
demand recorded for any 30- \ 24.45 % I
minute interval during the \
\ REDUCTION I
monthly billing period. 7 IN COST
II

Improving 6
Load Factors
Load factor (expressed in
terms of percentage) is a
measure of the uniformity
and efficiency with which
electrical energy is being
used. A good load factor LOAD F
implies a more constant rate
of electrical use, because kW
demand is held to a mini-
mum relative to total overall
use. In essence, the lower While load factor is one element in calculating the efficiency with which electricity is used, load
the established demand in factor ratios are not normally stated in billing information. Most billing information, however,
relation to kilowatthour provides sufficient information to determine load factor ratios using the following formula:
(kWh) use, the better the
load factor, the lower the Load Factor (%) = Energy Used (in kWh) X 1
relative cost for electric Maximum Demand (in kW) Time
service. (hours in billing
period)
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ELECTRICAL ENERGY MANAGEMENT GUIDELINES SERIES

For example, if 100,000kWh

are consumed over a monthly
TIME OF DAY
billing period (730 hours) and
I I I
during that time a peak
demand of 2 14 kW is
established, the load factor
would be 64 percent. Repre-
sentative ranges for load
factor in facilities without
specific load factor improve-
ments could be:

Facilities with a I-shift

operation - 35 percent Conventional System
Facilities with a 2-shift
operation - 60 percent
TIME OF DAY
Facilities with a 3-shift
operation - 80 percent.

The load factor curve shown

in Figure 1 shows how load
factor improvement can lower
your average energy cost.

The consumer may improve

his load factor in several
ways. Among these are: Off-peak Cooling System
Arranging work sched-
ules to reduce peak load Figure 2
by shifting some electri-
cal use to other time
Although cool storage may motors, generators, trans- load. Power factor is also
periods. not necessarily reduce your formers, and other inductive important to consumers,
building's overall energy equipment. The power because it can restrict
Using interlocks to consumption, it can signifi- being supplied is called the capacity and affect voltage
prevent simultaneous cantly reduce your building's apparent power and is regulation and service cost.
operation of selected on-peak demand and lower usually expressed in kilovolt The relationships between
equipment. your overall energy expenses amperes (kVA). The kVA. kW, kVAR, and PF
as these charts illustrate. apparent power must be are illustrated in Figure 3.
Using heat and cool
sufficient to supply both the
storage equipment to
total real and reactive power
reduce peak load (see
Figure 2).
Improving components of the
Power Factors consumer's electrical load.
Staggering preheating Most electrically-powered
times on process or machinery and equipment Power factor (PF) is the ratio
space heating applica- requires two kinds of power of actual power converted to
tions. -- real, usually expressed in work in a circuit to the
kilowatts (kW) and reactive, apparent power being drawn
Using demand control- from the line. It is an
Iers to limit kW demand usually expressed in kilovolt
in facilities where some amperes reactive (kVAR). important measurement to
power loads can be de- The real power is the work- utilities, because it affects
ferred. producing power. Reactive the amount of utility
power supplies the magnet- generating capacity required
Adding off-peak energy to provide service to a given
usage. izing field required by
 ELECTRICAL ENERGY MANAGEMENT GUIDELINES SERIES

Low Power Factor

Adjustments
Low power factor indicates
that electricity is being used
inefficiently, and low power
factor adjustments are
charges for the inefficiency
and resulting generating
capacity loss for TVA.

A facility can have a low

power factor for both
lagging and leading load
conditions. If the net
reactive power requirement
(LVAR) is inductive, a
lagging power factor
condition will exist. If the
net reactive power require-
ment is capacitive, a leading
power factor condition will
exist. The ideal condition
occurs when the inductive
and capacitive load compo-
nents are equal, in which
case the effects cancel, and
the apparent power supply-
ing the load will be equal to
the real power component of
the load. The power factor
in this case is 100 percent
(neither leading or lagging)
resulting in the most
efficient use of the power
supplied. Since this condi-
tion is difficult to achieve in
practice, TVA and distribu-
tors of TVA electric power
allow certain leading and
lagging power factor vari-
ations before adjustments are
applied to the customer's
electric bill.
ACTIVE POWER (KW)
Figure 3
Low lagging power factor Solenoids Power
conditions can result by the Measurements
use of various combinations Induction heaters Real power (kW) typically is
of the following common measured through demand
inductive devices. Lifting magnets metering. Apparent power
(kVA) may also be meas-
Induction motors, in- Small "dry-pack'' trans- ured. Reactive power
cluding motors that are formers. (kVR). not necessarily
parts of compressors on measured on demand meter\.
air conditioners, refrig- In most cases, the addition can be determined from:
eration systems, pumps, of properly sized and applied
etc. (These are the most capacitors can compensate 1 .) the mcawrcd k W and
common causes of low for low lagging power factor k V A u\ing the fomiula
lagging power factor conditions. in Figurc 3. or
conditions because so
many are in use and Low leading power factor
often run at less than conditions usually occur as a
full load.) result of too many fixed
capacitors connected to the
Inductive loads of fluo- electric system during louer
rescent ballasts load (off-peak load) condi-
tions. This condition can bc.
Rectifiers providing a corrected by installing
DC power supply automatic load scming
capacitors or by implrmcnl-
Arc welders ing manual proccdurc\ for
disconnecting thc cJp.uitorr
\vhcn n o t nccdcd.
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ELECTRICAL ENERGY MANAGEMENT GUIDELINES SERIES

Adjustments Included in Demand Charge

For consumers on General Power rate schedules, TVA accounts
for the expense of producing reactive power by including in its
rates:

Power factor provisions for customers with no

contract demand or with a contract demand of
5,000 kW or less.

Reactive demand charge provisions for customers

with contract demands above 5,000 kW.

Power factor improvement can be beneficial in lowering or

even eliminating cost adjustment increases on a power bill if a
facility's electric use meets one or more of the following
conditions:

The electric rate has a reactive or power factor

adjustment clause, and the facility's power factor is
less than the specified minimum.

There are problems with voltage regulation or

chronic low voltage.

Power factor is low and load growth is limited by

capacity.

The facility at certain load periods experiences

excessive leading power factor conditions. (Applies
only to customers with reactive demand charge
provisions.)

For More Information

It is advisable to review the need for power factor correction
with either your power distributor, equipment manufacturer,
consulting engineer, or TVA.

For more information on load factor and power factor improve-

ments, call or write your power distributor or the TVA office
nearest you.