Power Factor Surcharge Explained

What is it, and – most importantly – how is it calculated?

Power factor surcharge explained

Power factor surcharge. Another variable that businesses in Malaysia need to take account of when calculating their energy costs is the power factor surcharge. I’ll attempt to explain what this is and how it is calculated in simple, everyday terms, in this article.
Strangely enough, whilst many pages of their official website are quite difficult to understand, the TNB page that relates to the power surcharge factor and how to calculate it, is arguably an exception.

Of course, as One Alpha are qualified electrical engineers, it should make sense to us (right?). From experience however, we know that it is not always so clear how the power surcharge factor works to our clients.

According to the TNB page referenced above, the power factor is described as “an index used to compute the efficiency level of electricity usage.  The index is measured from 0 to 1. A higher index shows efficient usage of electricity and vice versa.”

And the reason that a power factor surcharge can be levied on your business is explained thus: “Low power factor shortens the lifespan of electrical appliances and causes power system losses to TNB.”

No national energy utility is designed to accept losses, hence the potential for surcharges in this case. Still, knowing this doesn’t necessarily help explain what the power factor surcharge is and – more importantly – whether it is an extra cost that your business might have to carry soon.

So, here’s a practical example to demonstrate, starting with a few definitions of the terms that your business is going to see on your electricity bill:

img-TNB-bill-1-300x248.2016-08-16-235115

In this redacted bill image, you’ll see various different ‘Units’ highlighted in red on the right of the page. These are defined as follows:

KW =Working Power (Actual Power, Active Power or Real Power) is the power that drives equipment and performs useful work.

KVAR=Reactive Power is the power needed by magnetic equipment such as transformers, motors and relays need to produce the necessary magnetizing flux.

KVA=Apparent Power which is the vectorial total of KVAR and KW.

For the calculation of power factor surcharge, the exact meanings of these terms is not so critical, apart from in this respect. The power factor is the ratio of working power to apparent power, or KW/KVA.

Okay, so based on these figures, let’s work out the potential for a power factor surcharge in this case:

img-TNB-bill-2.2016-08-16-235227

In this case, the power factor is 0.94 and as the highest efficiency rating is 1, this represents a healthy power factor that will not result in a surcharge.

So that – in very simple terms – is how to calculate the potential for a power factor surcharge for your own business. Of course, if you’d rather leave the work to the experts, you can always call in a fully qualified One Alpha specialist to do a guaranteed power factor calculation job for you.

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