Reactive Power Charges

Why have I got Reactive Power charges on my electricity bill?

Firstly, Reactive Power Charges are a charge made by the Distribution Network Operator and passed through to the customer via the electricity bill.

Why am I being charged for Reactive Power?

Distribution Network Operators charge Reactive Power Charges for sites that operate at a poor power factor.  In simple terms a site with a poor power factor draws more current to operate the equipment on the site which in turn puts a greater Demand on the Distribution Network.

What causes a poor power factor?

The equipment used on site has an effect on the power factor.  The most common cause is alternating current (a.c.) electric motors; these items are an inductive load which will cause a poor power factor.

The more reactive power (kVAr) consumed by the electrical load on site – the worse the power factor will be.  In addition to this sites with a poor power factor will have a higher than necessary kVA Maximum Demand.

What can I do about my poor power factor?

A poor power factor can be corrected by installing power factor correction capacitors.  Power Factor Correction Equipment companies will normally carry out a free survey and provide a quote for correcting the problem.

What are the benefits of improving a poor power factor?

  • Lower or no reactive power charges
  • A reduced Maximum Demand and a lower Availability Charge
  • Ability to free up capacity at site, previously taken up by the effects of a poor power factor (reactive or waste power).
  • Less strain on the Customer’s electrical installation

How are Reactive Power Charges calculated?

Each Distribution Network Operator has their own wording and calculations but in simple terms the following rules will apply to how they calculate the average power factor for a site.

  • If the Total kVArh units consumed exceed 33% of the Total kWh units consumed the power factor is lower than 0.95
  • If the Total kVArh units consumed exceed 50% of the Total kWh units consumed the power factor is lower than 0.90
  • If the Total kVArh units consumed exceed 90% of the Total kWh units consumed the power factor is lower than 0.75

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