What Is a Demand Factor?

In the electrical power industry, a demand factor is a ratio used to calculate the amount of a system's total demand that is being generated by different portions. The calculation divides the system's maximum demand by the load factor of the part of the system that is being examined. The ratio must have a numerical value of less than 1, though the demand factor is usually expressed as a percentage.

The demand factor is used to determine the maximum amount of energy demand that a portion of a system is capable of handling. It gives engineers a tool to make educated design decisions and those in charge of managing power grids the ability to determine which portions of the grid system may need to be alleviated. The size of each portion of the system is multiplied by the load factor to reveal electrical capacity.

In a circuit grid, the demand factor of each portion can be less than the sum of all of the system's connected parts. In theory, each section of the system should have a capacity that is equal to the load factor, yet in practice this may not always be the case. When the maximum threshold is reached, it is possible that the amount of electricity will cause failure or shutdown.

Engineers and power managers can use the demand factor to re-route electrical loads on a power grid system. For example, if there is a sudden surge in demand, managers can route some of the load to portions of the system that are not near capacity. This helps prevent failure along sections of the grid and causes the system to work more efficiently. Projected energy demand can be used in conjunction with known load factors to plan out how electricity will be routed throughout the system.

In some cases, portions of the electrical grid may be activated according to how much electrical demand is occurring on the system. Sections can also be primarily used for certain areas that typically require less or more energy. When the network is designed, the maximum demand factor can be built in anticipation of the average load. Each section's load factor is less than 1, since the sum of all the portions equals 100 percent of the entire system's capability.

The capacity is what the system should be able to handle if all sections are handling the maximum load simultaneously. Even though this rarely happens, it is a good benchmark for electric companies to use when deciding whether to upgrade equipment or expand networks. Maximum load factors are typically calculated for a specified amount of time, such as 20 minutes.