How Power Factor Correction Reduces Energy Bills

Power factor is an energy related efficiency ratio for AC (alternating current) electrical loads and complete electrical installations. Power factor is the ratio between the real power measured in kilowatts (kW) and the apparent power measured in kVA consumed by an AC (alternating current) powered electrical device or electrical installation. The ratio therefore measures how efficiently electrical power (input) is converted into useful work (output) from the system being measured. The closer the measured power factor is to Unity (1) the more energy efficient the system.

Power Factor Correction is the process of using capacitive devices to improve the power factor ratio. PFC may be used within a product such as a Switch Mode Power Supply (SMPS) or installed as a supplementary system to an installation where it is referred to as a Power Factor Correction System or PFC system.

Large energy users on half-hourly metering with their electricity supplier, can incur extra charges on their electricity bills for running sites with a poor power factor. These sites typically run many inductive motor-type loads and involved in some form of industry and manufacturing. The extra charges on their electricity bills are known as Reactive Power Charges.

Electricity Costs and Power Factors

Electricity bills are a record of how much energy a site has consumed within a period and the costs charged. These costs will include connection, usage and penalty charges. Installing the a correctly sized power factor correction system will help to remove the penalty charges and can help to reduce overall energy consumption, especially when part of an overall site’s energy efficiency improvement plan.

For power consumption, the base measurement unit is Watts (W) with users charged in terms of kilowatts (kW), Megawatts (MW) or Gigawatts (GW). This the ‘Real Power’ consumed and the time unit is hourly leading to kWh, MWh or GWh. Power measured in Watts should not be confused with that measured in VA (Voltage of the supply x Amps draw). VA measures the ‘Apparent Power’ and may also be expressed in kVA or MVA.

As stated Power Factor measures the ratio of Real Power to Apparent Power. The more the two curves are in phase with one another the nearer the Power Factor is to Unity (1). To measure energy requires a time element. For electricity billing the time element is one hour with energy usage charged by suppliers in kilowatt-hours (kWh) at fixed rate.

All buildings connected to the grid have electricity meters whether they are retail, offices, industrial sites or datacentres. The meter may be ‘smart’ allowing remote interrogation and monitoring or not and therefore requiring a meter read for total consumption, day and night tariff usage.

Large Energy Usage Sites and Half-Hourly Metering

In the UK, it is mandatory for sites with a peak-load usage above 100kW to be billed half-hourly (HH). These sites will have smart-type meters as they must also appoint a Meter Operator (MOP) and Data Collector (DC). The HH Meter Operator insalls and maintains the electricity meters and the communications and monitoring equipment to capture the consumption data.

The Data Collector is responsible for collecting the half-hourly data, validating this and passing the date to the electricity supplier for invoicing. The services can be provided by a third-party or the electricity supplier themselves.

Large energy users using half-hourly metering can incur Reactive Power charges which are in effect a penalty for operating at a less than optimal power factor.

Reactive Power Charges

Within any building will be a complex mix of electrical loads each with their own power factors which accumulate and contribute towards an overall power factor for the site. IT loads are capacitive and through increased drives to become more and more energy efficient have high or close to Unity power factors. Inductive loads including heating, lighting, motors, compressors and ballasts tend to have poorer power factors and lead to sites operating larger amounts of these types of system with a poor power factor and the charging for Reactive Power.

Reactive Power is the energy the electricity supplier must generate and supply for inductive loads to energise. This is non-working (Real) power that is drawn from the grid that electricity companies must supply but cannot charge for without the issuing of Reactive Power charges. Reactive Power is measured in kVAR (kVA Reactive).

Installing and Maintaining PFC Systems

Power Factor Correction systems use electrolytic-type capacitors to store energy. In a PFC system the capacitors act as reactive current generators and balance out the kVAR generated by inductive loads.

A power factor correction system is typically installed in a plant room and as close to the main LV (low voltage) distribution board as possible. The PFC system may be built-into the LV switchboard itself as a separate and generally easily accessible assembly. PFC systems also be distributed around a large site and especially large industrial manufacturing sites.

PFC systems are installed parallel to the mains power supply rather than in series. Whilst this means that a reduction in capacitance or system failure will not interrupt power supply to the connected loads, it does mean that regular maintenance and inspection of the PFC system is required.

PFC systems may provide visual, audible and remote alarms if there is a reduction in their operating capability or system failure. The alarms are typically volt-free and can be connected to a Building Management System (BMS).

Routine inspection and maintenance is may be carried out annually by a suitably qualified service engineer. The visiting service engineer will inspect the system for visible signs of corrosion, damage or failed capacitors and recommend their replacement as required. Failed capacitors are often easy to identify as they designed to ‘fail-safe’ and if there is any sign of thermal runaway will pop their caps as a final safety measure.

Without regular inspection or alarm monitoring, the only way to pick-up a system failure or capacitance reduction would be when reviewing electricity bills for the site from their supplier / District Network Operator (DNO). The charges for Reactive Power would return.

Energy Savings

Installing power factor correction on site with Reactive Power charges will reduce energy usage and lower electricity bills. Most clients see a Return on Investment of around 2-5 years, dependent upon the size of the power factor system required and the amount of charges. Once installed and with regular maintenance, a PFC system should operate for 15 years or more before it may require a complete replacement.