Electricity Bill - Peak Power
Electricity Bill - Peak Power
(OP)
I was talking to the electrical superintendent at my work. He was talking about VFDs and how they reduce your energy bill because they ramp up the current slowly rather than just applying full power right away. I was then told that this is how energy companies actually bill you: based on your PEAK power during any billing cycle... I don't understand how or why this is? Can someone explain this to me?






RE: Electricity Bill - Peak Power
For very large motors, this might make sense. However, in most cases the energy needed to accelerate a motor is nearly constant. Extending this over a few more seconds with a VFD soft start scheme won't change the 15 minute integral significantly. What such soft start schemes do accomplish is to reduce the voltage dip on the plant electrical system due to motor starting as well as stresses on the motor, switchgear and other equipment.
RE: Electricity Bill - Peak Power
And your superintendent is wrong. If the VFD is saving you any money, it is not going to be due to a reduction in demand charge.
RE: Electricity Bill - Peak Power
RE: Electricity Bill - Peak Power
RE: Electricity Bill - Peak Power
Best to you,
Goober Dave
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RE: Electricity Bill - Peak Power
Conversely, some are also now offering discounts in some areas for those who shift their peak energy use to off-peak times, such as at night, so that they have more capacity available to supply all the ACs running on hot days. That's going on here where I live. From 7PM to 7AM, we pay roughly 1/3 of the rate we pay from 7AM to 7PM (I think, I'm not looking it up right now).
"Will work for (the memory of) salami"
RE: Electricity Bill - Peak Power
RE: Electricity Bill - Peak Power
"Will work for (the memory of) salami"
RE: Electricity Bill - Peak Power
Most motors which only take a few seconds to start won't cause a significant increase in the demand. An exception could be a very difficult to start motor which is by far the largest load in your plant.
Your VFD is likely costing you rather then saving if this peak savings was the reason for installation. Sadly, there are so many that believe installing a VFD automatically means you save energy yet in many cases it simply is not true. Various goverment bodies which will hand out grant money if you install a VFD have made the energy savings misunderstandings even worse. If your VFD just runs to full speed (or any other constant speed) then it's costing you energy.
RE: Electricity Bill - Peak Power
"Will work for (the memory of) salami"
RE: Electricity Bill - Peak Power
A VFD with will typically have a power factor of 96-98%, whereas without a VFD, the power factor of a motor would be in the 80-85% range. Energy loss in the VFD will reduce this power factor benefit somewhat though.
The other way in which VFD's can reduce demand charges is when they allow the motor to run at reduced speed/reduced power throughout the entire billing period. This may be the case for motor loads with seasonal power demands for instance.
All this being said, I would never install a drive simply to reduce demand charges. There should be a compelling reason from an energy savings and/or system operation perspective to justify a using a drive.
RE: Electricity Bill - Peak Power
In theory you are correct, but demand charges based on kVA are fairly rare, at least in my experience. Also, you are assuming that no other power factor correction is being applied to the constant speed motor.
RE: Electricity Bill - Peak Power
We have one customer that uses leading VFDs in their container cranes to offset low power factor on their refrigerated container service. Their peak 10 second demand is about 8MW when all the cranes are lifting. Their demand charge is only about 2 MW based on using a 15 minute window (rather than having anything to do with VFDs changing peak demand).
Mark Pigman
Tacoma Power
RE: Electricity Bill - Peak Power
For example, many utilities here in Canada charge the GREATER of 100% of peak KW or 90% of peak kVA.
So if your peak p.f. is better than 0.90, no 'kVA' or power factor penalty.
If your peak power factor drops below 0.90, then you will be paying a higher demand charge even if you are not benefiting from any extra kW.
This incents businesses to invest in power factor correction, saving EVERYBODY in infrastructure costs.
RE: Electricity Bill - Peak Power
If you think about it, the demand charge (even with the annual 'ratchet') makes sense. The utilities have to provide enough 'stuff' to handle your worst demand all year even if you only use it for one hour.
This includes your service wire, distribution transformer, power lines radiating from the substation, the size of the substation itself, the transmission network, and the generation plants. Or at least a tiny fraction of each.
RE: Electricity Bill - Peak Power
RE: Electricity Bill - Peak Power
What is extremely rare is an ratcheting INSTANTANEOUS demand meter. I have never seen one but I have heard plenty of anecdotal references to their existence. I once posted a question in this forum years ago asking for corroborating evidence, I got nothing. I'll repeat it now. If anyone KNOWS that their utility uses a ratcheting INSTANTANEOUS demand meter, please let me know who it is and I would like to get backup information from that utility. I personally believe this is an urban myth that is used by people trying to sell solutions to a problem that does not really exist.
"Will work for (the memory of) salami"
RE: Electricity Bill - Peak Power
RE: Electricity Bill - Peak Power
dpc - it's a regional thing. I have seen bills from many utilities in Canada and a few bills from utilites in the USA and they all charge demand based on the larger of 0.9 x demand KVA or demand KW. The most typical is a 15 minute window. I had wrote 80% before but read tinfoils post and would agree with 90%. If they charged by kW demand only then there would be no incentive to correct the power factor.
RE: Electricity Bill - Peak Power
And maybe this is more of an issue with some customer types, as I never saw this with what I called the clean industries (there shops were cleaner also).
I don't see those problems now that I work for a utility with more clean industries (more urban), but I think it is also that the utility is also more flexable with the service options, and it is more difficult to make a case herd without it being news worthy (the voters have a larger role).
RE: Electricity Bill - Peak Power
I've seen the same. Many small utilities have power factor penalties in their rate schedules, but in practice they often do not impose them since it is generally their largest customers who would be paying the penalty. This is starting to change around here since BPA has imposed more stringent PF penalties on these utilities.
RE: Electricity Bill - Peak Power
This means you could save around $60 to $90 a month by installing a VFD on a 75kW motor. The accounting guys typically want to see a 2 year payback which means the VFD must cost in the $1440 to $2160 range to justify the installation. The chassis VFD will cost more than this amount.
The conclusion I would reach is that sure you could reduce the demand charges but the savings would never justify installing the VFD. Heck, it's difficult to justify the installed cost of a capacitor bank when the power factor is >80%.
RE: Electricity Bill - Peak Power
However if the load were constant then a fixed capacitor bank behind the motor switch would be more cost effective.
Another place a low PF happens is in some high energy lighting.