Energex kVA Demand Charges. Why are you paying too much?

The vast majority of commercial and industrial customers connected to the electricity network and allocated to a default demand tariff are paying for their Energex kVA Demand usage over a 15 or 30-minute interval measured in kVA rather than the old way in kW. This means that energy retailers are billing you for wasted power supplied to your business.

On top of that we have seen record increases in retail energy prices this year so no wonder you are paying too much!

Electricity costs are one of the highest operating expenses for commercial and industrial businesses – think, compressor motors, fluorescent and high bay lighting, and welding sets. But, is your site operating efficiently? Or, are you paying for energy you don’t use?

If your site has poor power factor, you might be paying more for electricity than you need to.

In the picture above we see the different measurements of power consumption such as kW | kVA | kVAr and the ratio percentage called PF or power factor.

What is Energex kVA Demand & power factor?

watch this video > kVArEnergyStorage

Power factor is the ratio between the energy you’re supplied by the grid and the energy you use. The energy you use is your kW (active power) and your energy supplied is known as your kVA (total power).

To help you visualise – Imagine you’ve just bought a pint of beer. The full pint of beer represents the power you’re supplied (kVA). The amber liquid represents your active power (kW) – what you need to operate a motor. The foamy top of your beer represents your reactive power (kVAr) – the power you need to sustain the electromagnetic field in the motor. This reactive power doesn’t do useful work, but, it places a heavier drain on the kVA transformer out on the street or in your yard, in which the electricity network had always supplied at no charge.

So, the more efficiently your facility is operating, the less head on your beer the more amber liquid your receiving for the same price and less money you’re wasting on electricity you don’t need.

How You Can Improve Your Power Factor.

Your power factor = your beer liquid (kW) / your pint volume (kVA). The closer your power factor is to 1, the more efficiently your system’s operating and the less energy (and money) you’re wasting.

Industrial and commercial businesses will find it difficult to reach a power factor of 1 because of your heavy reliance on electric motors and lighting for operations. However, you can improve it so it’s pretty darn close.

You can reduce your amount of reactive power (kVAr) by installing capacitors into your electrical distribution boards. These capacitors will free up your pint-capacity, reducing the amount of froth so you don’t need to buy a bigger pint. It also means you’ll pay less for your beer! Capacitors are a solid investment as they prolong equipment life, reduce maintenance, and reduce electricity demand and costs.

Where to next?

Power factor correction equipment can be the most cost-effective way to lower your energy bill and promises a return on your investment, usually within 1 – 3 years. You’ll need to talk to an energy expert to help model the right sized system for your site.

By utilising your sites unique meter data, energy experts can predict the reduction in Energex kVA demand and model the savings projection, pretty darn close.

Tariff Optimisation.

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Network operators set the access tariffs available for customers to connect to the electricity network. Either their energy retailers or electrical contractors can help chose the correct tariff based on their usage profile. As business grows your usage profile changes, meaning the default connection tariff may no longer be suitable financially and a tariff optimisation review should be undertaken. This will work in coincidental with an increase or decrease in your Energex kVA demand due to added equipment or improving your sites power factor.

Generally speaking your account manager from your energy retail company may not completely understand what power factor is, most sparkys don’t either. So, make sure too engage an experienced energy manager that understands meter data and a deep understanding of the current tariff structures available from your network operator, then you can confidently make a decision to drive energy management and measure the results post installation.