How Power Factor Correction Can Save Your Business Money

May 4, 2022

Does your business spend to much money on electricity?

Power factor correction (PFC) is an often-overlooked component in large electrical installations. It measures how effectively your business uses power. With the majority of businesses within heavy industry having large power costs, todays article will show you how you can minimise these costs while increasing the efficiency of your electrical installation. 

How it works:

By assessing the ratio of real power (kW) to apparent power (kVA). Real power is the amount of power which is actually used by your onsite equipment (kW) whereas apparent power is the total amount of power (kVA) supplied to the site by the utility. A site with a lower power factor draws more apparent power than reactive power, thereby increasing your energy consumption usage. When you have a low power factor the voltage and current supplied becomes out of phase and requires correcting. Low power factor is generally caused by having large inductive loads on site (induction motors, air conditioning compressors, large lighting banks etc). The way in which this is corrected is by creating Reactive Power (kVAR) loads to your installation using capacitor load banks. This helps to correct the imbalance of voltage supplied and current drawn by equipment to become more in-phase with each other resulting in a better ratio of real power to apparent power. 

How Power Factor Correction Can Save Your Business Money 1
https://electrical-engineering-portal.com/beer-mug-and-power-factor

How it benefits your business:

  1. Reduced Demand Charges

If the power factor is low on your site, the percentage of the measured KVA will be significantly greater than the KW demand as mentioned above. Power factor correction will therefore lower the demand charge, helping to reduce your electricity bill.

  1. Increase in load capabilities of existing equipment

When circuits start drawing reactive power from an installed capacitor bank on site such as a PFC it causes a reduction in current flow from an improved power factor and may allow the circuits to carry new loads, saving the cost of upgrades when extra capacity is required. 

  1. Improved voltage

As the line current increases due to a low power factor the voltage drop in the conductor also increases which results in lower voltage supplied to equipment. PFC reduces this voltage drop in the conductor resulting in the correct voltages supplied to equipment. 

  1. Reduction in power losses

System conductor losses are proportional to the current squared (I2). Since the conductor current is reduced due to the power factor improvement, the losses are inversely proportional to the square of the power factor. 

  1. Reduced carbon footprint

By reducing your systems current power demand through PFC, your company puts less strain on the supply grid. Over time this lower demand can account for hundreds of tons of reduced carbon production by utilities. 

If you are looking to increase your power efficiency and cost and have not  yet considered power factor correction on your site, please give us a call for a free assessment and action plan. 

Author: Sam Soady

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