Load factor and peak demand calculator

How the calculation works

Load factor compares your average demand with your peak. A plant that ran flat out around the clock would have a load factor of 100%; one with short, sharp peaks has a low load factor.

Where the tariff includes a demand charge, every kW shaved off the peak saves that charge each month, without using less energy. The effective cost per kWh includes both parts of the bill.

Worked example

A plant uses 600,000 kWh in a 30-day month with a 1,400 kW peak. It pays 10 per kW per month and 0.10 per kWh.

• Average demand: 600,000 ÷ 720 h = 833 kW. Load factor: 833 ÷ 1,400 = 59.5%.
• Bill: about 13,800 in demand charges (the period is 30 days, slightly under an average month) plus 60,000 for energy.
• Cutting the peak by 100 kW raises the load factor to 64.1% and saves 12,000 a year, with no change in energy use.

Ways to reduce peak demand

• Stagger the start-up of large motors, furnaces and chillers after breaks and shift changes.
• Move flexible loads, such as batch mixing, charging, pumping to storage or water heating, out of the peak window.
• Use a demand controller that sheds non-critical loads when the peak approaches its target.
• Check how your utility measures demand: usually the highest 10, 15 or 30-minute average in the month. A single bad interval sets the charge for the whole month.

Some tariffs bill demand in kVA rather than kW. In that case improving power factor also lowers the demand charge; see the power factor correction calculator.

Questions