Energy Management Descriptions

Energy Management Descriptions

Energy management can be a complex and confusing topic. Learning about load factor and power factor can give you a better understanding of energy management and help you make decisions to save your business money.

Load Factor

Simply, the load factor is the actual amount of kilowatt-hours delivered on a system in a designated period of time as opposed to the total possible kilowatt-hours that could be delivered on a system in a designated period of time.

For example, assume that an office building uses a total of 10,000 kWh during a 30-day (720 hours) billing period and has a peak load of 25 kW during that time, making the building's load factor for that billing period 0.56, or 56 percent.

Using the same formula, a facility can also determine their annual load factor. Theoretically, if a company is able to shift operations so that their usage is constant and no peaks or valleys exist, it could achieve a load factor of 100 percent.

Why load factor matters
Increasing your load factor will reduce the average unit cost of the kilowatt-hour (kWh). In many situations, improving load factor could help companies save a considerable amount of money.

How to increase load factor
Many organizations can improve load factor by reducing demand or increasing production efficiency. Distributing loads over different times or installing energy management systems can often help. Lowering peak demand along with keeping demand stable is often a cost-effective way to maximize the use of your power.