Power Factor Correction

Power factor is the ratio of real power (kW) to apparent power (kVA) in your electrical system, measured on a scale from 0 to 1. A power factor of 1.0 means all the total power supplied by the network is being used as actual power for productive work. In practice, most electrical systems also draw reactive power to sustain the magnetic fields in inductive equipment such as electric motors, transformers, and compressors. This reactive power does not perform useful work, but your energy distributor still has to supply it, and in many cases, you pay for it through demand charges on your electricity bill.

Inductive loads are the primary cause of poor power factor. Electric motors, transformers, compressors, HVAC systems, and welding machines all draw substantial reactive power. Non-linear loads such as variable-speed drives, LED drivers, and servers add harmonic distortion, further degrading the true power factor of your electrical infrastructure. Mining operations with large motors, conveyors, and ventilation fans are particularly susceptible to fluctuating power factor throughout shift cycles, resulting in wasted energy and inflated energy costs.

Power factor correction reduces your kVA maximum demand, directly lowering demand charges on your electricity bill. Australian energy retailers are transitioning to kVA demand billing, meaning businesses now pay for the total power supplied, including reactive power. Correcting your power factor to 0.95 or higher can reduce demand charges by 10–30%. PFC systems also free up electrical capacity in existing transformers, switchboards, and cables, deferring or avoiding capital expenditure on new equipment that can run into the hundreds of thousands of dollars.

Passive power factor correction uses capacitor banks to supply reactive power and correct the power factor at a relatively low cost. Active power factor correction such as our static VAR generators and HAPFC systems, uses power electronics to generate precise, real-time compensation. Active PFC systems respond faster, handle harmonics better, and require less maintenance, but have a higher initial cost. The right choice depends on your load profile, harmonic environment, and total cost of ownership over the equipment’s lifetime.

Check your electricity bill for kVA demand charges or power factor penalties. If your measured power factor is below 0.9, you are likely paying more than necessary and would benefit from correction. Sites with significant inductive equipment, such as electric motors, compressors, and HVAC systems, are the most common candidates. Our power quality team can conduct a site assessment to determine the most effective PFC equipment and approach for your electrical system.

A Static Synchronous Compensator (STATCOM) is a power factor correction device that uses power electronics to regulate voltage, correct power factor, and manage harmonics in medium- and high-voltage systems. Unlike capacitor banks, STATCOMs provide continuous, smooth compensation and are suited to utility-scale and large industrial applications where other PFC equipment cannot operate effectively. We are one of the few Australian manufacturers with STATCOM capability.