2015-03-31 Planning & Organisation Committee Agenda

PLANNING & ORGANISATION COMMITTEE MEETING AGENDA                                   31 MARCH 2015


CORPORATE SERVICES DEPARTMENT REPORTS
3                        INVESTMENT IN POWER CORRECTION FACTOR EQUIPMENT AT FIVE COUNCIL
                         SITES
DOCUMENT INFORM AT ION




Author                           Director Corporate Services, Michael Shave
                                 Corporate Services Department

Index                            ECM/Financial Management/Electricity Accounts

Attachments                      Nil


EXECUTIVE SUMMARY
Not applicable.

RECOMMENDATION
That Council note the report by the Director Corporate Services to the Planning & Organisation
Committee Meeting dated 31 March 2015 and, subject to final confirmation of the acceptance of
Energex’s regulatory pricing proposal by the Australian Energy Regulator, approve new capital
expenditure up to a total of $45,000 in relation to power factor correction equipment at five (5)
Council sites with the funding to be sourced at the 3rd quarter budget review.


REPORT
Beginning on 1 July 2015, Energex is proposing to change how network tariffs are calculated for
some large business customers (including Council), and are offering subsidy funding to assist
customers to manage the financial impacts of these changes. Council has an opportunity to
invest in equipment that will improve the efficiency of electricity usage at several sites with large
electricity usage to reduce the financial impact of Energex’s proposed network tariff changes.

Detailed and robust financial analysis has been undertaken to examine the cost benefit
associated with the investment in power factor correction (PFC) measures. The findings of the
financial analysis indicate the financial viability of investing in power factor correction equipment
at five (5) Council sites.

Power factor correction (PFC)

Power factor is a measure of how effectively electrical power is being consumed at a site and is
measured as a ‘dimensionless’ number in the interval of -1.0 to 1.0.

It is measured as a ratio of the real power flowing to the load, to the apparent power in the circuit.
Apparent power (kVA – kilo volt-ampere) is the actual power supplied to a site, whilst the real
power (kW – kilo watts) is the power consumed at the site. Power supplied to a site that is
absorbed and not used is referred to as reactive power, a measure of ‘unproductive power’.
Requiring reactive power for the operation of equipment and / or motors results in a low power
factor and decreased efficiency.

It is widely accepted that a power factor of 0.95 or higher (closer to 1.0) demonstrates an efficient
use of power, whilst a power factor of less than 0.9 can lead to a higher than necessary amount
of power being supplied to a site (refer Figure 1).




                                                                                      Page 10 of 53