P.F.C Relative to Power Quality & Costs
Poor power factor has a direct effect on power quality in the network, which will also directly and indirectly affect the running costs of the site. This is more apparent in larger fabrication & manufacturing sites.
Power Quality: Large reactive currents can interact with the network impedance to cause voltage fluctuations. For example, switching large inductive loads on can cause momentary sags, while switching large capacitor banks can cause transient over-voltages. A poor PF also often accompanies other power quality issues. Notably, many loads that cause leading PF (like uncontrolled rectifiers in electronics) also inject harmonics into the system. These harmonics distort the voltage and current waveforms, which can interfere with sensitive equipment and cause additional heating. In summary, a facility with poor PF may experience or inflict on the grid issues like voltage instability, flicker, and higher total harmonic distortion (THD), all of which are detrimental to power quality. Both capacitor-based, and SVG power factor units have harmonic mitigation capabilities. See also our wall-mounted S.V.G & A.H.F units under power quality systems.
Compliance Requirements: Beyond charges, some network companies set power factor requirements as part of their connection standards. For instance, a network may require that customers maintain PF within the range of 0.95 lagging to 0.95 leading at all times. If a site consistently operates outside these bounds, the utility might require corrective measures to be installed as a condition of continued service (especially for large industrial connections). These rules exist to maintain overall network health. The trend in NZ (and globally) is that as power systems get more optimised, tolerance for poor PF is decreasing – utilities either pass through the cost of poor PF or insist on correction.
Utility Charges and Penalties: Perhaps the most immediate impact for businesses in New Zealand is financial. A growing number of New Zealand electricity distribution companies (lines companies) impose reactive power or power factor charges on larger customers if their PF falls below a certain threshold (commonly 0.95 lagging). These charges are designed to incentivise users to correct their PF and thus reduce strain on the network. Typically, the charge is levied per kVAr of reactive power drawn in excess of what a 0.95 PF would require. Moreover, many NZ commercial electricity contracts include peak demand charges measured in kVA. Therefore, a low PF not only triggers a reactive penalty, but also inflates the measured peak demand, because the apparent power is higher.
Overall, the message is clear: improving your power factor can directly improve power quality and directly save money. It reduces unnecessary loading on both your internal electrical systems and the national grid infrastructure, aligning with New Zealand’s goals for efficient energy use. By using power more efficiently, we can stretch our limited power generation & capacity as far as we can.
