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How does Victoria's new demand charges impact your business?

Jul 05, 2016

From 1 July 2016, Victorian distributors Citipower (central Melbourne) and Powercor (western Victoria) have changed the way demand is charged from kW to kVA.

What is demand?

Demand is a measurement of the maximum amount of electricity used at a certain point of time, which is usally over a half hour period.  For larger users, it is charged on your bill by your local electricity distributor to assess if there is enough capacity to deliver electricity to your premise.

What is the difference between kW and kVA?

KW is a measurement of “real power”, which is the component of electrical current running through your meter that is converted to actual energy use.  KVA is a measurement of “apparent” power, which is the total current running through the meter, including the leftover current not converted to actual usage. 

The ratio between real power and apparent power is called the power factor.  For example, if the kW measured on your meter is 120 KW and the KVA measured is 150 KVA, then the power factor would be 0.8.

What does this mean for my energy bill?

A site operating efficiently should aim to have a power factor of at least 0.98.  Power factors well below this suggest a lot of current is being “lost” at site, which under Citipower and Powercor’s new KVA charge means costs will be higher than an efficiently running site. 

How can I optimise the power factor?

Installation of Power Factor Correction equipment can increase the power factor, which reduces the KVA charges you’ll need to pay. 

If you are interested, please contact Energy Intelligence for a no obligation analysis.  We will analyse yourmeter data over the last 12 months to assess whether installation of such equipment would be a good fit for your business.

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