IMPROVING LOAD FACTOR

Your company or commercial institution could lower its demand by improving load factor.
Increasing your load factor will diminish the average unit cost (demand and energy) of the kWh.
Depending on your situation, improving your load factor could mean substantial savings.
The load factor corresponds to the ratios between your actual energy consumption (kWh) and the
maximum power recorded (demand) for that period of time.
Load Factor equals:
Consumption during the period (kWh) x 100
Demand x Number of hours in that period.
By analyzing your load profile and your needs, you may be able to improve your load factor by doing
the following:
A Demand reduction
Reduce demand by distributing your loads over different time periods.
B Increase production
Keeping the demand stable and increasing your consumption is often a cost-effective way to
increase production while maximizing the use of your power.
*In both cases, the load factor will improve and therefore reduce your average unit cost per kWh.

How to calculate LOAD FACTOR?

The load factor percentage is derived by dividing the total kilowatt-hours (kWh) consumed in a
designated period by the product of the maximum demand in kilowatts (kW) and the number of hours
in the period. In the example below, the monthly kWh consumption is 36,000 and the peak demand
is 100 kW. There were 30 days in the billing period.
To determine the load factor, you can use the following formula:
Total kWh for the billing period x 100
(Peak Demand X # of Days X 24 Hours)
Example:
This load factor indicates the monthly energy consumption of 36,000 kWh used by the customer was
50% of the total energy available (72,000 kWh) for use at the 80 kW level.
To determine the load factor, you can use the following formula:
Total kWh for the billing period x 100
(Peak Demand X # of Days X 24 Hours)
________36, 000 kWh_x 100___
80 kW x 30 days x 24 hrs/day
36,000 kWh x 100
57,600 kWh
= 0.625 x 100
= 62.5% load factor
ANOTHER EXAMPLE:
Total kWh = 18,000 kWh
Demand = 50 kW
The number of Days = 30
Hours per Day = 24
______18, 000 kWh__x 100_____
(50 kW X 30 Days X 24 Hours)
18,000 kWh x 100
36,000 kWh
= 0.50 x 100
= 50%
In this example, the Load Factor is 50% showing that, on average, the peak demand was fully used
for 12 hours a day for 30 days. One of the simplest ways of improving load factor is to shave the
peaks. Shaving means having a portion of the electrical load now operating at peak times of the
day shifted to non-peak times.
For example, instead of operating ten machines at 11:00 a.m., it would be advantageous to have
three operating at 9:00 a.m., five at 10:00 a.m. and two at 11:30 p.m. All machines are still operating
but not at the same time.
The diagram below indicated in red, where savings would be possible;

The diagram below shows, the daily load profile after the peaks have been shaved. The dark shaded
peak area above has been shaved and relocated in the illustration below.
In electrical engineering the load factor is defined as the average load divided by the peak load in a
specified time period.[1]

Typical example of a large commercial electrical bill: kW Demand = 436 kW; kWh Use = 57,200
kWh; Number of days in billing cycle = 30d

Load Factor [%] = {(57,200 kWh / (30 days X 24 hours per day X 436 kW)} X 100% = 18.22%

It can be derived from the load profile of the specific device or system of devices. Its value is always
less than one because maximum demand is always higher than average demand, since facilities
likely never operate at full capacity for the duration of an entire 24 hour day. A high load factor
means power usage is relatively constant. Low load factor shows that occasionally a high demand is
set. To service that peak, capacity is sitting idle for long periods, thereby imposing higher costs on
the system. Electrical rates are designed so that customers with high load factor are charged less
overall per kWh. This process along with others is called load balancing or peak shaving.

The load factor is closely related to and often confused with the demand factor.

The major difference to note is that the denominator in the demand factor is fixed depending on the
system. Because of this, the demand factor cannot be derived from the load profile but needs the
addition of the full load of the system in question.