Load factor
The ratio of average demand to peak demand over a period, indicating how evenly a consumer or system uses electricity.
Load factor measures how flat a load profile is. A load factor of 100% means constant demand; low values indicate pronounced peaks relative to average use.
Example: a commercial building using 438,000 kWh per year with a 100 kW peak has a load factor of 438,000 / (100 × 8,760) = 50%.
Typical values:
- National power systems: about 55 to 70%. Europe's interconnected system is around 65 to 70%; summer-peaking US systems with heavy air conditioning are often lower.
- Residential customers: 20 to 40%, because evening peaks are short.
- Continuous industrial processes and data centres: 80 to 95%.
A higher load factor spreads fixed generation and network costs over more kWh, lowering the average cost of supply. This is why many tariffs for commercial and industrial users include demand charges (per kW of peak), rewarding customers who flatten their profile through storage, scheduling or demand response.
The term is sometimes used, especially in the UK, as a synonym for a generator's capacity factor. Strictly, load factor describes demand, while capacity factor describes generation output relative to nameplate.
Related terms
All terms →- Peak load
The highest electricity demand recorded on a grid during a given period, which sets the capacity the system must be able to supply.
- Baseload
The minimum level of electricity demand on a grid over a day, season or year, historically served by plants that run continuously at high output.
- Capacity factor
The ratio of the energy a power plant actually produces over a period to the energy it would produce running at full nameplate capacity for the whole period.
- Demand response
Changes in electricity consumption by end users, in response to price signals or operator requests, to balance the grid.
- Full-load hours
The number of hours per year a plant would need to run at rated power to deliver its actual annual output; equal to capacity factor multiplied by 8,760.
- Power vs energy (kW vs kWh)
Power (kW) is the rate of energy flow at an instant; energy (kWh) is power accumulated over time. Capacity is measured in power, output in energy.