When power factor correction cost is weighed up against benefits that are yielded from correcting power factor, the pros outweigh the cons, almost without exception. Advantages include:
- Decreased power demand;
- Reduced electricity costs;
- Increased profitability; and
- Improved electrical supply.
We take a closer look at the potential operational and monetary impact of power factor correction on commercial and industrial operations.
First things first, what is power factor correction?
Let’s recap on what power factor correction is, as simply as possible. When it comes to electricity costs, there are two key components that generally cut into your profits.
Firstly, your utility supplies you not only with “active” power, but it also supplies you with “reactive” power.
- Active power: Also referred to as “real power” or “working power”, is the power that is used to perform actual work.
- Reactive power: Often also referred to as “watt-less power”, is the power your electrical installation draws to create magnetic fields in various electrical components, such as motors, lighting ballasts, transformers, etc.
The problem here is that even though you only effectively use the true power component of it, your utility charges you for the total power you have sued, which includes both the true power (usable) and the reactive power (non-usable). By improving the power factor of your installation to an optimal power factor, you will significantly reduce the reactive power drawn from the utility.
The second issue that has a negative effect on your electricity costs; is what is known as the “maximum demand.” The maximum demand of your installation is the maximum amount of total power (active and reactive power you have used during a 30 minute period, within a 30 day period. The higher your maximum demand, the higher your electricity costs will be. Power factor correction will also reduce the maximum demand of your installation, which will in turn reduce your electricity costs as well.
The true cost of power factor
The following summarised case study, will help to put power factor correction cost as well as your potential electricity cost savings into perspective:
- Background: The company in question is a large abattoir in Gauteng that forms part of a large food processing company in South Africa.
- Problem: Abattoirs typically require substantial volumes of power, as most of their processes involve electric motors. For this reason, they are constantly looking for ways to improve their energy efficiency.
- Approach: The company commissioned Alpha Power Solutions to conduct a detailed audit of their electrical supply network. Alpha Power Solutions then made recommendations for the supply and installation of power factor correction equipment to the value of R395k at their plant.
- Outcome: Due to the improved power factor, the abattoir recovered their investment in less than 18 months, through electricity savings. In addition, a total savings of R4 million has been projected over the minimum life expectancy of the power factor equipment, which is 10 years.
Through power factor correction, Alpha Power Solutions consistently empowers commercial and industrial companies to save up to 20% on their electricity bills; or to expand their electrical capacity at minimal cost. Click here to read more operational case studies or upload your bill for your complimentary power factor pre-assessment.