Energy, Demand and Load Factor

Energy, Demand and Load Factor
It is essential to have a basic understanding of “Energy” and “Demand” to evaluate the electric bill and
any strategies related to energy cost reduction. The water analogy below is provided to illustrate the
general principles required to understand “Energy” and “Demand”.
Energy
Energy is the amount of electricity consumed. It is measured in
kilowatt hours (abbreviated kWh) and the monthly charge includes
every kWh used during the month. Some rate plans charge
different rates for different times of the day, or months of the year
(called Time of Use or TOU rate schedules).
The Energy (kWh) charge is not affected by how fast you use the
electricity, only the total amount used.
Demand
Demand is the speed or rate at which you “demand” energy from
the utility. In this analogy, how wide open you turn the faucet.
Demand is measured in kilowatts (abbreviated kW) during each of
the 15 minute “interval” periods per month (i.e. approximately
3,000 intervals which are 96 per day, 30/31 days per month). It is
often called a “ratchet” effect because the billing mechanism uses
the highest 15 minute period each month (called “Peak Demand”).
The bottom line is that demand charges often represent more than half of many commercial customers’
monthly charges. As a result, it is often possible to dramatically reduce the monthly energy bill without
reducing the amount of “Energy” used through implementation of demand management strategies.
Load Factor
Figure 1
Load Factor is a comparison of Peak Demand and Energy used.
In the water analogy, the Load Factor calculates a percentage
comparing the amount of Energy that would have been used if
the facet were opened at the Peak Demand level all month,
versus the Energy actually used.
As shown in the Figure 1, a low load factor percentage indicates
that there is high demand (and related high demand charges)
but relatively little energy is being used. Low load factor
percentages generally indicate a high potential for a successful
demand control strategy.
Antara Energy
Antara Ltd. 452 Silverado Ranch Blvd. #444 Las Vegas, NV 89183
www.AntaraEnergy.com (702-430-1949)
Antatra Ltd. 2015. All rights reserved.
Additional Information
Contact: Jerry Sprecher
619-618-0448
[email protected]