Reactive power charges and power factor: the hidden half-hourly cost
Reactive power charges appear on many half-hourly bills when a site's power factor drops below about 0.95. Learn what kVArh means, what causes it, and how to check and reduce the charge.
Many half-hourly (HH) electricity bills include a charge for reactive power, shown in kVArh, that few people ever question. Because it sits among the network charges it is easy to treat as fixed, but it is driven by the equipment on your site and can often be reduced. This guide explains what reactive power is, what causes it and how to check your own bill and meter data.
Key points
- Reactive power is measured in kVArh (kilovolt-ampere reactive hours) and most HH meters record it alongside kWh.
- Distribution Network Operators (DNOs) charge for reactive power when a site's power factor falls below about 0.95.
- Motors, compressors, pumps, transformers and some lighting drivers are common causes.
- Power factor correction (PFC) equipment can reduce the charge, but it must be sized and maintained properly.
- You can work out your own power factor from your bill or HH data.
What is reactive power?
The electricity supplied to your site does two jobs. Active power, measured in kW (and kWh over time), does useful work: turning motors, heating, lighting and running computers. Reactive power, measured in kVAr (and kVArh over time), does no useful work itself. It sets up the magnetic fields that inductive equipment such as motors and transformers needs, and it flows back and forth between your site and the network.
Together they make up apparent power, measured in kVA. This is what the cables, transformers and switchgear on the network actually have to carry, which is why reactive power matters to your DNO even though you do not "use" it in the normal sense.
Power factor in plain English
Power factor is the ratio of active power to apparent power: kW divided by kVA. It runs from 0 to 1. A power factor of 1 means all the current drawn is doing useful work. A lower figure means the network is carrying extra current that does nothing productive for you.
DNO charging statements generally set the threshold at about 0.95. Below that, reactive units above the allowance become chargeable. At a power factor of 0.95, reactive energy is roughly a third of active energy, so a useful rule of thumb is: if your kVArh is regularly more than about a third of your kWh, expect a reactive power charge.
Poor power factor has a second cost. As power factor falls, your demand in kVA rises for the same kW. That brings you closer to your Agreed Supply Capacity, which is set in kVA, and increases the risk of excess capacity charges.
What causes a poor power factor?
Most reactive power on commercial and industrial sites is inductive, also called lagging. Common sources include:
- Induction motors, especially lightly loaded or oversized ones driving fans, conveyors and pumps.
- Compressors for compressed air, refrigeration and cold storage.
- Transformers, including site-owned high-voltage transformers, which draw reactive power even at light load.
- Welding equipment and some older process machinery.
- Older fluorescent lighting with magnetic ballasts.
Modern electronics play a part too. LED drivers, IT equipment and variable speed drives can have a poor power factor or create harmonic distortion, and large numbers of them on one site can change the overall picture. Some electronic loads are capacitive, or leading, so a correction unit sized for an older, more inductive load can end up over-correcting after a lighting or equipment upgrade.
How to check your bill and HH data
Reactive power is a DUoS (Distribution Use of System) charge, so the threshold and rate are set in your DNO's charging statement. You can find your network operator from your postcode, or from the first two digits of your MPAN core. On a pass-through contract the charge is usually listed as its own line; on a fixed all-inclusive contract it may be passed through separately or built into your rates, so check your terms. Our guide on how to read a half-hourly bill shows where network charges usually sit.
Use this checklist:
- Look for a line labelled "reactive power", "excess reactive power", "kVArh" or similar, and note the units charged and the rate.
- Check whether the charge appears every month or only in certain seasons or production periods.
- Ask your supplier or data service for kVArh data alongside your kWh data.
- Work out your power factor for the period: kWh divided by the square root of (kWh squared plus kVArh squared).
- Compare the result with 0.95. If it is lower, find out which times of day or week have the highest reactive units.
- If you already have correction equipment, check whether the charge started or rose recently, which can point to a fault.
As a worked example with round numbers, a month showing 100,000 kWh and 50,000 kVArh gives a power factor of about 0.89, below the usual threshold. Bear in mind that DNOs usually assess reactive units half-hour by half-hour, so a monthly figure is a starting point rather than the exact charge calculation.
Power factor correction
The usual fix is power factor correction (PFC) equipment. For inductive loads this is normally a bank of capacitors that supplies reactive power locally, so less is drawn from the network. Options range from fixed capacitors on individual motors to automatic, stepped units at the main switchboard that switch capacitance in and out as the load changes.
Points to raise with a qualified electrical contractor:
- Measure first. Sizing should be based on HH kWh and kVArh data, ideally backed by a power quality survey.
- Harmonics. Sites with many drives, LED drivers or IT loads may need detuned or filtered units, as plain capacitors can interact badly with harmonics.
- Over-correction. Too much correction at low load can push the site to a leading power factor.
- Maintenance. Capacitors degrade and fuses fail. A unit that has quietly stopped working is a common reason for a reactive charge to reappear.
Whether PFC pays for itself depends on the size of your reactive charges, your DNO region's rates and the cost of the equipment, so get the figures for your own site before committing.
Reactive power in the wider bill
Reactive power is one of several network costs linked to how your site draws power. It is worth reviewing alongside your ASC, excess capacity charges and red-band use, because the same equipment often drives all of them. A half-hourly bill check will confirm whether the reactive units billed match your meter data, and a supply capacity review looks at kVA demand and ASC together.
Get help with reactive power charges
If you are not sure whether your site pays reactive power charges, or why, send us a recent bill. We will check the charges against your contract and data and tell you what we find.
Request a free quote or bill check or call 07565 147 170.
Frequently asked questions
What is a good power factor for a business site?
Most DNOs start charging for reactive power when power factor falls below about 0.95, so treat that as a minimum target. Sites with well-maintained correction equipment often run closer to 1. Aim to stay above the threshold throughout the working day, not just on average, because reactive charges are usually assessed for each half-hour.
Do non-half-hourly sites pay reactive power charges?
Reactive power charges are generally a feature of half-hourly metered sites on site-specific network tariffs, whose meters record kVArh as well as kWh. Smaller sites on standard meters do not usually see a separate reactive line. If a reactive charge has appeared after a move to half-hourly metering, check your power factor.
What if reactive power has been billed incorrectly?
If the reactive units on your bill do not match your meter data, or the wrong rate has been applied, raise a query with your supplier and ask for the supporting half-hourly data. Contract terms and back-billing rules affect what can be corrected, so act promptly. A bill check can identify discrepancies before you raise the query.
