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What is Power Factor (PF) and Power Factor Correction (PFC)?

Most commercial and industrial premises have inductive loads such as electric motors, fluorescent lighting, ventilation, refrigeration, air conditioning etc. They distort the power supply making it inefficient.

PF is the measure of this inefficiency and is the difference between actual power (kW) and apparent power (kVA), which the equipment actually uses.

PFC works by improving the PF bringing it closer to 1 (unity), therefore reducing apparent power (kVA). The apparent power is the total requirement that a facility places upon the electric utility to deliver voltage and current, without regard to whether or not it will get used. Electric utilities typically charge customers a higher rate when the PF falls below a certain level — often 90%.

Low PF requires an increase in the generation and transmission capacity of the electric utility to handle their active power component caused by inductive loads. Therefore, to avoid the expensive installation of additional capacity, utilities usually charge a penalty for poor PF and include a demand charge component (based on kVA) in the bill to customers.

A low PF means a higher kVA and consequently a higher electricity bill for the same site load (kW). Therefore, demand savings can be achieved by improving a site’s PF.

What are Power Factor Correction Units?

PFC Units are capacitors which are added to your facility’s power distribution system and correct low PF. This is best accomplished via an automatic controller that switches capacitors, and sometimes reactors, on and off. The most basic applications use a fixed capacitor bank.

There has been an increase in demand for PFC units, which is why in May 2015, the GEM Energy team underwent exclusive training with NHP, an Australian entity established in 1968 and still manufacturing in Australia. NHP is arguably Australia’s leading manufacturer of Electrical Engineering products including PFC Units.

Like with everything we do at GEM Energy, we first learned and understood the ins and outs of these products, including the various pitfalls that are associated with incorrect installation or servicing, before we offered them to our customers.

Unfortunately, we have seen a large contingency of operators just buying and selling these units without any skill or experience.

Through our unique relationship with NHP as a direct partner, GEM Energy can offer absolute confidence and reassurance to our customers. Each PFC unit we supply is professionally engineered and custom-built by NHP in Melbourne.

What does a Power Factor Correction Unit do?

  • A PFC unit is connected between your incoming power supply and your main distribution panel comprising of capacitors.
  • It offsets the inductive currents by introducing equal and opposite capacitive currents, thereby neutralizing the inductive currents.
  • The capacitors reduce the total current and apparent power (kVA) drawn from the utility company.

Benefits Of PFC

  • Reduces electricity consumption and utility bills by reducing current drawn and energy used.
  • Reduces or eliminates penalties from utility companies for low PF.
  • Reduces your building’s carbon emissions by reducing installed energy demand.
  • Reduces wear and tear on motors, thereby reducing maintenance and extending lifetime.
  • Provides a degree of protection against voltage spikes and surges.
  • Improves machinery performance.

The outcome

  • PFC will reduce your electricity bill. GEM Energy has installed PFC units at a range of sites and, depending on the type of loads within the building, the savings average 5% – 25%.
  • In cases where the installation is sized to the maximum demand, this will usually give a payback of under two years.

Look No Further. Get Started Today.

How changes in network billing may affect you

Businesses in some states will already be aware of PFC and know exactly what it means.

In July 2015, network operators like Energex & Ergon began shifting from KW demand billing to KVA and then KVAR billing.

When we draw power from the grid there are two types of power: Real Power and Reactive Power.

We consume Real Power when doing everyday normal activities like lighting, heating or cooling. Reactive Power is the energy stored in the load and then returned to the source – similar to the water hammer effect.

The total demand on the network is the sum of Real Power and Reactive Power, also known as Total Power.

If you are running heavy load appliances like high bay lights, pumps, motors, and welders, it is likely that you have a low PF as these appliances draw Reactive Power. Other transformer-based appliances like laptops and computers also have high Reactive Power draw. You can see the transformer in your laptop’s power cable.

Before July 2015, we were billed based on Real power (KW). Since then the networks have started transitioning to KVA billing which is effectively the Total Power taken from the grid. The networks will also start billing for excessive Reactive Power (KVAR) consumption.

Real power = KW

Reactive power = KVAR

Total power = KVA