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Where demand is billed in kVA, improving power factor cuts apparent power for the same useful load: kVA = kW / power factor. Correcting from 0.88 to 0.99 reduces billed demand by about 11% with no change in production. Contract utilisation shows whether the sanctioned demand itself can be reduced.
Apparent power
kVA = kW / power factor
Saving
Saving = (kVA now - kW / target power factor) x demand rate
By capacitor banks or active filters sized to supply the reactive power the load draws. Automatic switched banks are needed where load varies, and harmonics must be checked to avoid resonance.
If utilisation is persistently below about 80%, yes — but reducing it caps the load that can be drawn, and exceeding the new contract triggers penalty charges. Review the load profile including growth first.