If your site is half hourly metered, two lines on your electricity bill may be costing more than they need to: reactive power charges and capacity charges. Both are linked to your site's power factor, and both can often be reduced.
We check your bills for these charges as part of our bill validation work. Where they are significant, we can introduce you to a specialist power quality engineer to survey your site, and then help you review your agreed capacity once the work is done.
What is power factor?
Some of the electricity your site draws does useful work, such as turning motors and running machines. This is active power, measured in kW. Equipment with motors, compressors, transformers and drives also draws reactive power, measured in kVAr, which is needed to run that equipment but does no useful work itself. Together they make up the apparent power your connection has to carry, measured in kVA.
Power factor is the share of the total that does useful work. A power factor of 1 means none is wasted. The lower it goes, the more capacity your site uses for the same output.
Where it shows up on your bill
Charged by your network operator in pence per kVArh and passed through on your bill. It applies when reactive power goes above roughly a third of active power in a half hour, which is the same as a power factor below about 0.95. It is worked out every half hour, not as a monthly average.
Your agreed capacity is set in kVA and charged per kVA per day, with extra charges if you go over it. Because kVA = kW ÷ power factor, a low power factor means you need more capacity for the same load.
A simple example
A site running 1,000 kW at a power factor of 0.8 needs 1,250 kVA of capacity. At a power factor of 0.99, the same load needs about 1,010 kVA.
Which sites are affected
- Usually affected: larger sites with half hourly, current transformer (CT) metering at low or high voltage, on site specific network charges. Factories, cold stores, warehouses with refrigeration, plants with compressors, pumps, fans or variable speed drives.
- Usually not affected: smaller sites on whole current meters, which pay standing and unit charges only.
- Worth checking now: some CT metered sites recently moved onto half hourly settlement may start to see capacity and reactive power charges for the first time once their transition period ends.
What power factor correction is
Power factor correction equipment, usually a bank of capacitors with a controller, supplies the reactive power your equipment needs on site, so less has to come from the network. It is normally fitted at the main switchboard and switches in steps to match your load.
- It starts with a survey. A qualified engineer measures your power factor and power quality over time, so the equipment is sized for how your site actually runs.
- Harmonics matter. Sites with drives, inverters and other electronic loads can have harmonics. Detuned equipment or filters may be needed, because a plain capacitor bank can make harmonics worse.
- Over correcting can also cost. Pushing the power factor too far can also be charged. A properly set up controller prevents this.
- It needs looking after. Equipment should be maintained, typically once a year.
What it can and cannot save
| Charge | Can correction help? |
|---|---|
| Reactive power charges | Yes, often substantially, where your site is being charged for them |
| Capacity charges | Potentially, by lowering your kVA demand. Any reduction in agreed capacity has to be requested from the network operator and has rules attached |
| Your kWh usage | Not in any meaningful way. The savings come from the charges above |
| Transmission (TNUoS) charges | No |
Whether it pays back depends on the charges on your bills, your network area and how your site runs. A survey will show the cost and payback before you commit.
How we help
- We check your bills. Under a Letter of Authority we look at your half hourly bills and data for reactive power charges, capacity charges and any capacity excess.
- We show you what we find. How much these charges cost you each year, in plain numbers.
- We introduce a specialist. If the charges are significant, we introduce you to a power quality engineer for a site survey and a costed proposal. You decide whether to go ahead.
- We help you review your capacity. Once correction is in place, we can help you look at whether your agreed capacity is still right, and the rules for changing it.
If we ever receive a fee for an introduction, we will tell you before you decide anything.
Is your site paying for reactive power?
Send us a recent half hourly electricity bill and we will tell you whether reactive power or capacity charges are worth looking at.
Send us a bill →Common questions
How do I know if I am paying reactive power charges?
Look for a line on your electricity bill such as "reactive power" or "excess reactive power", charged in kVArh. It usually only appears on half hourly bills for larger sites. If you are not sure, send us a bill and we will check.
Does power factor correction reduce my energy usage?
Not in any meaningful way. The savings come from lower reactive power charges and, in some cases, lower capacity charges.
Can I reduce my agreed capacity straight away?
Not always. Network operators have rules on how often and when agreed capacity can be reduced, and capacity you give up may cost money to get back later. We can help you check before you ask.
Do you install the equipment?
No. We are energy consultants, not engineers. We identify whether it is worth looking at and introduce a specialist power quality engineer who carries out the survey and installation.
Please note: this page is general information, not advice for your site. Network charges, thresholds and rules vary by network operator and change over time. Whether power factor correction is worthwhile depends on your site, equipment and bills, and any engineering work should be designed and carried out by a qualified engineer. We will always set out what we find in writing before you make any decision.