Power factor correction studies are performed to improve the existing power factor in the plant. Power factor is simply the ratio of real to apparent power consumed by your operations.
By maintaining a high power factor, your plant may avoid costly utility bills resulting from an enforced “low” power-factor clause or high kVA demand.
Other benefits of an improved power factor include:
- Release of power system capacity (kVA)
- Improved bus voltage profiles
- Reduced power system losses
The power factor study begins with a utility rate structure review together with a historical sample (six to 24 months) of electric bills. This information is used to evaluate present use patterns and to determine the potential economic benefits of improving power factor.
Utility rate structures usually provide significant economic incentives to reduce total kVA demand. Typical demand charges can vary from minimal to $20 per demand kVA, so for reducing a demand by just 100 kVA with a demand charge of, let’s say, $10 per kVA could save $1,000 per month. It’s easy to see that larger demand reductions and higher demand charges could potentially provide large savings.
