What is Power Factor Correction?

As well as the power that is used in equipment (heating, lighting, driving motors), known as real power, a site may also draw power which is not directly used, known as reactive power. The combination of two is known as apparent power. Power Factor is the relationship between real and apparent power (kVA). If your site has a poor power factor, you could be paying for energy that cannot be used.

When you pay for a latte, the last thing you want is more froth than coffee. The same thing can be said about power. Froth on a latte is like wasted energy.


How does Power Factor impact my business energy cost?

Taking control of and monitoring Power Factor can lead to reduced kVA demand and therefore reduced electricity costs. Improving Power Factor can lead to savings on your business electricity bill.

Installing Power Factor Correction Equipment can be a cost effective measure to reduce your electricity bill. AGL Energy Services has delivered Power Factor Correction projects with short payback periods, in some cases approximately one year.

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Benefits of AGL’s Power Factor correction service can include:

  • Reduced cost: Reduction in kVA demand and therefore electricity costs.
  • Equipment life: Extend the life of your equipment.
  • Compliance: Compliance with regulatory codes.
  • Expansion: More power available for site expansion without the need for new switchboards and cable.

How can we help?

AGL Electroserv are PFC specialists that can assist your business with installing, designing and servicing Power Factor Correction equipment. Contact us to find out how we can help your business.


What is Power Factor and how does PFC Equipment work?

The Power Factor of an electrical installation is the ratio between the power that is actually used (kW) and the power that is supplied (KVA). It is a measure of how efficiently an installation uses Electrical Energy.

Power factor equipment supplies the reactive current (eg. magnetising current required by electric motors to turn but does no real work) required by an installation that is normally supplied from the supply transformer and therefore passes through the electricity meters. Reducing this magnetising current through the electricity meters and the switchboard will reduce the cost if the tariff is based on KVA Demand (or apparent power). The power actually used is the ‘real ‘ Power (in watts). The power supplied is the “apparent” power (in Volt Amps) .

Power Factor = Real Power (kW)/Apparent Power(KVA)

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How big is PFC Equipment and where does it go?

Power Factor Correction Equipment is placed within, or near, the main electrical switchboard. The equipment is connected into this switchboard and connected to a convenient point below the electricity suppliers metering equipment (i.e. Current transformers). A new switch may be required in some cases.

Depending on the rating of the equipment (in”kVAr” or Kilo Volt Amps Reactive) the typical size is he same as a standard fridge.

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How much will it save?

This depends on the following:

• The Tariff Type. For PFC to reduce Energy Costs you must be on a “KVA” Demand Tariff

• Maximum demand (in KVA) as shown on your electricity Bill

• The initial power factor at this maximum demand.

• The target power factor (usually 0.98 for best economy)

• The “demand profile” eg. KVA demand over a, say, 12 month period and the power factor over this same period.

As an example: Average Maximum Demand = 200KVA @ 0.8pf improving PF to 0.98

o Cost per KVA/month (as shown on Bill) = $10:50

o Cost /mth without pf = $ 2,100

o New Avg KVA @ 0.98pf = 163KVA

o New Cost/Month = $1,712

o Savings/year(ave) = $ 4662

o Simple Payback (yrs) = 1.5 Years*

* based and an estimated installed cost of a 100kVAr PFC at approx. $7,000

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