QLD electricity customers need to manage kVA demand to reduce costs

In the latest July 2014 tariff schedule Energex has continued its move towards a kVA demand tariff. Large customers (ICC, CAC, EG) are now on straight DUOS and TUOS kVA demand and capacity charges. Energex has indicated that SAC demand customers will be moved onto a kVA demand tariff in July 2015 (SAC demand customers consume between 100MWh pa and 4GWh pa).

What does this mean for business in South East QLD?

Managing and reducing peak kVA demand is now critical to reducing energy costs. Network demand charges can account for over 25% of total electricity costs.

One option to reduce kVA demand is to install power factor correction. If your business has a poor power factor (<0.90 at peak demand) than it should consider conducting an energy audit and assessing the cost-benefits of power factor correction. In many cases the payback on installing power factor correction is < 2 years. However this can vary significantly and should be assessed by a qualified consultant. Energex is offering co-funding for businesses in designated areas to reduce peak demand, including installing power factor correction. For more information click here.

It is important to take a holistic view at managing peak demand rather than simply installing power factor correction. It is important to first assess the potential causes of low power factor (e.g. large motors running at reduced loads) and look at options to reduce peak demand first (e.g. through plant equipment schedules). Once peak demand has been minimised the next option is to investigate power factor correction.

Who is Energex?

Energex is the electricity network provider supplying South East QLD, including the Gold Coast, Brisbane and the Sunshine coast.

Historical review of Energex’s transition to kVA pricing

Prior to July 2010 all large and small customers in the Energex network were charged a kW demand, and or capacity tariff. While this may represent the real power consumed by sites it does not represent the apparent power the network must supply. kVA demand tariffs better reflect the pressure a customer places on the electricity network.

In July 2010 Energex introduced a transitional kVA tariff (a kVA adjustment) for large customers. This was the first step in providing a price signal for large customers to improve their power factor and reduce their peak kVA demand. In July 2011 and again in July 2012 Energex varied the kVA adjustment parameters to increase the price signal for large customers to improve power factor.

In July 2013 Energex introduced straight kVA pricing for DUOS demand and capacity charges for large customers. Recently in July 2014 Energex continued the transition to straight kVA pricing for large customers by introducing kVA TOUS demand charges.