Edisonic Energy

Category: HV (High Voltage)

Updates on high-voltage equipment, power transmission, grid infrastructure, and advanced electrical safety systems.

  • Australian manufacturers losing $300K to power quality

    Australian manufacturers losing $300K to power quality

    Last quarter, your facility’s electricity bill jumped 18% despite production remaining stable. Your CFO demanded answers. Your facility manager mentioned something about “kVA charges” and “power factor” but couldn’t explain why you’re suddenly paying $47,000 more per year for the same energy consumption.

    You’re not alone. Across Australia, manufacturing, mining, and industrial facilities are discovering a hidden tax on their operations, one that’s been quietly draining profitability for years but has become impossible to ignore as utilities transition to new billing structures.

    The culprit? Poor power factor. And it’s costing your business far more than you realise.

    What you’re really paying for (and why it matters now)

    Here’s what’s changed: Australian utilities have fundamentally restructured how they charge industrial customers. The old model, paying for kilowatt-hours (kWh) consumed plus peak kilowatt (kW) demand, has been replaced by kilovolt-ampere (kVA) demand charges that directly penalise facilities with poor power quality.

    Translation for executives: You’re now being charged not just for the productive energy you use, but for the inefficiency of how you use it.

    The beer mug analogy every CFO understands

    Imagine ordering a beer. You pay for a full pint glass, but it arrives half foam. You’re paying for 568ml but only getting 284ml of actual beer. The foam takes up space, requires the same glass size, and costs the same, but delivers zero value.

    That’s exactly what poor power factor does to your electricity bill.

    • Real power (kW) is the beer—it does useful work, runs your equipment, powers production
    • Reactive power (kVAr) is the foam—necessary for motors and transformers to function, but doesn’t produce output
    • Apparent power (kVA) is what utilities bill you for—the full glass, foam and all

    When your power factor is poor (say, 0.80 instead of 0.98), you’re paying for 25% foam. And under kVA demand billing, you pay full price for every bit of that foam, every month, forever.

    The new reality: kVA demand charges across Australia

    Between 2020-2025, every major Australian distribution network transitioned to kVA-based demand tariffs:

    New South Wales (Ausgrid, Endeavour, Essential Energy)

    • Demand charge: 34.668 cents per kVA per day
    • Ratcheting: Your maximum kVA over 12 months determines charges
    • Impact: A single power factor excursion during peak demand costs you for an entire year

    Real example: A 1,500kW facility at 0.82 power factor draws 1,829kVA. At Ausgrid’s rate, that’s $231,240 annually in demand charges. Improve to 0.98 power factor, and the same facility draws only 1,531kVA – $193,665 annually.

    Difference: $37,575 every year.

    Queensland (Energex, Ergon Energy)

    • Demand charge: $8.90 per kVA per month (Brisbane area)
    • Measurement: Peak 30-minute kVA demand
    • Impact: Every kVA of unnecessary apparent power costs $106.80 annually

    Real example: A Brisbane injection molding facility with 500kW demand was paying for 625kVA at 0.80 power factor: $5,563 monthly demand charges. After improving to 0.99 power factor, they pay for only 505kVA – $4,495 monthly.

    Savings: $1,068 per month, $12,816 annually.

    This facility’s power factor correction equipment paid for itself in 18 months. They’ll save over $250,000 over the next 20 years by fixing a problem they didn’t know they had.

    Victoria, South Australia, Western Australia

    Similar kVA-based structures with regional variations in rates and measurement methodology. Regardless of location, the formula remains: poor power factor = higher kVA demand = substantially higher bills.

    Beyond demand charges: The complete cost picture

    Power factor penalties represent only the visible portion of poor power quality costs. The complete financial impact includes:

    1. Energy waste: Paying to transport nothing

    Reactive power doesn’t do useful work, but it still flows through your cables, transformers, and switchgear. That current creates heat losses (I²R losses) that you pay for twice: once in energy charges and again in demand charges.

    Typical impact: Facilities with 0.80-0.85 power factor waste 12-18% of electrical energy as distribution losses within their own facility. For a facility with $800,000 annual energy costs, that’s $96,000-$144,000 in avoidable waste.

    2. Equipment failures: The silent killer

    Voltage variations from poor reactive power management are leading causes of premature equipment failure:

    Motors: Every 1% voltage deviation from nameplate reduces motor life by approximately 3%. Voltage instability from poor power factor can shorten 20-year motor life to 12-15 years, forcing premature replacement of $80,000-$200,000+ equipment.

    Transformers: Voltage and current stress from reactive power and harmonics reduce transformer life by 30-50%. For facilities with $500,000 in transformer assets, this represents $100,000-$150,000 in premature replacement costs over equipment life.

    Variable Frequency Drives: DC bus capacitors in VFDs are particularly sensitive. Poor power quality reduces capacitor life from 7-8 years to 3-5 years, creating expensive unexpected failures during production.

    3. Production downtime: When seconds cost thousands

    Voltage sags—brief voltage dips lasting 0.05 to 0.5 seconds, trip sensitive equipment and halt production. These events stem from poor reactive power management during motor starts, equipment switching, and load changes.

    Financial impact calculation:

    For a $10M annual revenue manufacturing facility operating 6,000 hours yearly:

    • Revenue per hour: $1,667
    • Typical voltage sag events: 10-20 annually
    • Average downtime per event: 1-3 hours (including restart)

    Annual downtime cost: $16,670 to $100,000 from a power quality issue most facilities don’t actively manage.

    Mining operations face even steeper costs. A crushing circuit processing 4,000 tonnes per hour of ore worth $35 per tonne generates $140,000 per hour in revenue. A single voltage sag causing 3-hour downtime (clearing material and restarting) costs $420,000.

    4. Maintenance burden: Reactive fixes vs. Proactive solutions

    If your facility uses traditional capacitor banks for power factor correction (installed 10+ years ago), you’re likely spending $20,000-$40,000 annually on:

    • Capacitor replacement every 5-7 years
    • Contactor maintenance and replacement
    • Emergency repairs during production periods
    • Harmonic filter adjustments as loads change

    Poor power quality accelerates this maintenance cycle, creating unplanned costs at the worst possible times.

    The complete financial picture: A mid-sized facility example

    Let’s quantify this for a typical 2MW average demand Australian manufacturing facility:

    This represents 20-25% of total electrical costs, a hidden tax that accumulates quarter after quarter, year after year, without appearing as a line item labeled “power quality problem.”

    Over 20 years, this facility will pay $7.6 million for poor power quality, enough to fund major production expansions, technology upgrades, or simply flow to the bottom line as additional profit.

    Why this crisis is hitting Australian manufacturers now

    1. Manufacturing under pressure

    Australian manufacturing output declined 2.6% in 2024, with energy costs cited as a primary factor. Since 2022-23, over 1,390 manufacturers have declared insolvency. In this environment, a $100,000-$300,000 annual hidden cost can be the difference between profitability and closure.

    2. Utility billing evolution

    The transition to kVA demand tariffs makes power factor financially visible in ways it never was before. Facilities that operated for decades with poor power factor suddenly face escalating bills, creating urgent pressure to address an issue previously ignored.

    3. Grid instability from coal retirement

    AEMO forecasts 90% of coal generation capacity retiring by 2034-35, replaced by variable renewable energy. This transition creates more voltage variations and disturbances, even if your facility hasn’t changed, the grid around you has, making power quality management more critical.

    4. Regulatory enforcement increasing

    Utilities are enforcing AS/NZS 61000 power quality standards more strictly, with formal non-compliance notices, required corrective actions, and potential disconnection for severe violations. Poor power factor often accompanies harmonic issues, creating compounding compliance pressure.

    The critical questions every executive must ask

    1. What is our current power factor, and what is it costing us?

    Most facility managers don’t actively monitor power factor because it wasn’t financially important under old billing structures. It’s critically important now.

    Review your utility bills for kVA demand vs. kW demand. If kVA exceeds kW by more than 10%, you’re paying substantial penalties. A 20% gap represents potentially $50,000-$200,000 in annual avoidable costs depending on facility size.

    2. When were our reactive power compensation systems last evaluated?

    If your facility has capacitor banks installed 10+ years ago, they’re likely:

    • Operating at reduced capacity (capacitor degradation)
    • Responding too slowly for modern dynamic loads
    • Creating harmonic resonance issues
    • Requiring increasing maintenance investment

    These legacy systems were designed for electrical loads that no longer represent your facility. Variable frequency drives, modern controls, and equipment changes have fundamentally altered your reactive power requirements.

    3. What’s the opportunity cost of delaying action?

    Every quarter you continue operating with poor power factor represents another $25,000-$75,000 in avoidable costs (for typical facilities). That’s cash flow that could fund:

    • Equipment upgrades improving productivity
    • Workforce development and retention
    • Research and development for competitive products
    • Simply flowing to bottom line as additional profit

    Additionally, every quarter of delayed action is time where competitors might be addressing these same issues, gaining cost advantages that compound over time.

    What solutions actually work (without getting technical)

    Modern power quality solutions, specifically dynamic reactive power compensation using Static VAR Generator (SVG) technology address all these issues simultaneously:

    Eliminate kVA demand penalties by maintaining optimal power factor continuously
    Reduce energy waste by minimising reactive current in distribution system
    Protect equipment through voltage stabilisation and harmonic filtering
    Prevent downtime with millisecond-response voltage support during disturbances
    Reduce maintenance with solid-state systems replacing mechanical capacitor banks

    Typical results:

    • 15-30% reduction in total electrical costs
    • 12-24 month payback periods across industries
    • 20+ year equipment life with minimal maintenance
    • $500,000-$3M value creation over equipment lifetime (depending on facility size)

    Is poor power factor costing your facility six figures annually?

    If the costs outlined in this article sound familiar? Rising kVA demand charges, equipment failures, production disruptions, you’re facing a solvable problem with proven solutions.

    Edisonic Energy specialises in helping Australian industrial facilities:

    • Understand what power quality issues are actually costing them
    • Evaluate modern reactive power compensation solutions
    • Calculate facility-specific ROI and payback periods
    • Implement proven technology that delivers measurable results 

    We work exclusively with advanced SVG (Static VAR Generator) technology that’s replaced traditional capacitor banks across mining, manufacturing, steel, and renewable energy sectors, with typical payback periods of 12-24 months and 15-30% electrical cost reductions, creating $500,000-$3M+ in value over equipment life. 

    Our team of specialists understands Australian energy markets, utility tariff structures, and industry-specific challenges. Contact us to explore whether modern reactive power compensation makes sense for your facility:

    SVG Product: https://edisonic.com.au/svg 

    Email: info@edisonic.com.au

  • Australia’s transformer crisis: Solutions for the energy boom

    Australia’s transformer crisis: Solutions for the energy boom

    When Elon Musk stood on stage at the Bosch ConnectedWorld Conference and warned of an impending global transformer shortage, many dismissed it as hyperbole. Today, with lead times stretching beyond 18 months and prices surging over 60%, his forecast has become Australia’s reality.

    As our nation accelerates toward renewable energy targets and grapples with aging grid infrastructure, the question isn’t whether we need transformers, it’s how quickly we can secure them.

    Australia’s perfect storm

    Australia’s transformer market tells a story of converging pressures. The market is projected to double from $1.48 billion in 2024 to $2.99 billion by 2033, an 8.15% annual growth rate that reflects unprecedented demand.

    Three forces are driving this surge:

    Renewable energy transition at scale. With 11 GW of coal-fired power stations retiring and renewable capacity replacing them, our grid infrastructure needs a complete overhaul. Unlike traditional power plants, renewable energy systems require 1.5 to 3 times more transformers due to their distributed, variable nature. Large-scale solar farms alone can require hundreds of small transformers to handle decentralized power generation.

    Critical infrastructure aging. Decades old distribution networks desperately need modernization. The challenge isn’t just meeting future demand—it’s maintaining current service levels with equipment that’s exceeded its design life.

    Policy momentum. The Australian government’s Equipment Energy Efficiency Program is actively raising minimum energy performance standards for distribution transformers, driving replacement cycles faster than anticipated.

    Major projects underscore the scale of opportunity. Western Australia has committed $1.6 billion to electricity network expansion, including the $584 million Clean Energy Link – North program. Hitachi Energy secured contracts to supply 850 MVA transformers for Victoria’s Golden Plains Wind Farm, which will power over 765,000 homes annually.

    Yet here’s the challenge: Australia imports a significant portion of its transformer requirements, with imports projected to reach $1.45 billion by 2026. This dependency, combined with global supply constraints, creates both urgency and risk for our energy transition.

    The global shortage explained

    The transformer crisis isn’t unique to Australia, it’s a worldwide phenomenon driven by three megatrends:

    Electric vehicle proliferation. Each EV requires 5-6 voltage converters, and the buildout of charging networks adds exponential pressure. EVs are essentially “giant electronics on wheels,” and every charging station installation creates additional transformer demand.

    AI data center explosion. The computational power behind artificial intelligence requires massive, stable power infrastructure. Data centers need countless step-down transformers to stabilize voltage for GPUs and CPUs operating at unprecedented scales.

    Grid modernization everywhere. Developed economies face the same aging infrastructure challenge. In the United States, transformers average 30-40 years old, far beyond their expected 25-year lifetime. The U.S. Department of Commerce predicts domestic transformer demand will rise 50% by 2030.

    The result? Hitachi Energy, the world’s largest transformer producer, confirms that global lead times now often exceed two years, up to four years for large units. Major manufacturers are racing to expand capacity with multi-billion dollar investments, but scaling up production takes 1-2 years due to complex manufacturing requirements. Experts don’t expect supply-demand balance before late 2026.

    China’s manufacturing powerhouse

    Against this backdrop, one nation stands apart: China produces over 60% of the world’s transformers and has maintained the top position in global exports for years.

    The numbers are staggering. Between January and August 2025, China’s transformer exports reached 29.7 billion yuan, up 51.42% year-over-year. In August alone, exports totaled 4.7 billion yuan, a 57.9% increase. China exports approximately 3 billion transformers annually across all categories.

    By region, growth has been dramatic:

    • Asia: 2.03 billion yuan (+65.39%)
    • Europe: 1.51 billion yuan (+138.03%)
    • Africa: 476 million yuan (+28.03%)

    China’s advantage isn’t just scale—it’s integration. The country maintains a fully integrated, controllable supply chain from raw materials like silicon steel and copper through to assembly and testing. It’s the only nation capable of delivering “mine-to-machine” coverage at global scale, with faster delivery and lower costs.

    Recent technological achievements underscore this leadership. In August 2025, the world’s first 500 kV vegetable oil-insulated transformer was successfully commissioned in Guangzhou, setting a new industry benchmark for the highest-voltage unit of its kind worldwide.

    The practical impact is clear: while European transformer lead times now exceed 18 months, Chinese suppliers can deliver in 10-12 months at 20-30% lower cost. In a crisis market, these advantages are decisive.

    Edisonic Energy: Your Australian bridge to global solutions

    This is where Edisonic Energy enters the equation.

    As an Australian-owned supplier, we’ve built partnerships with leading Chinese transformer and energy infrastructure manufacturers to bring world-class production capabilities to Australia’s doorstep. We understand both worlds: the technical requirements and standards that Australian projects demand, and the manufacturing excellence that Chinese facilities deliver.

    What we offer:

    Reliable supply chains. While global lead times stretch beyond 18 months, our established manufacturing partnerships enable more predictable delivery schedules for Australian projects.

    Competitive value. By leveraging Chinese manufacturing efficiency, we provide cost-effective solutions without compromising on quality or compliance with Australian standards.

    Local expertise and support. We’re not just importers—we’re Australian specialists in electrical equipment for renewable energy generation, smart grid applications, and critical infrastructure projects. We speak your language, understand local regulations, and provide ongoing support.

    Quality assurance. Our partnerships are with manufacturers producing equipment that meets international standards and integrates seamlessly into Australian infrastructure projects.

    As Australian businesses, utilities, and government agencies race to upgrade aging infrastructure and integrate renewable energy, the transformer supply chain becomes a critical path item. Delays cascade through project timelines. Cost overruns threaten budgets. Energy transition momentum stalls.

    Edisonic Energy provides a pragmatic solution: access to proven manufacturing capacity, competitive pricing, and reliable delivery timelines—all backed by Australian ownership and local support.

    The opportunity ahead

    Industry research forecasts the global transformer market will reach $103 billion by 2031, nearly doubling from $58.6 billion in 2021. Australia’s market is growing even faster, with the next 3-5 years representing a golden opportunity for those who can secure reliable supply.

    The transformer supply crisis Musk predicted is here. But in every challenge lies opportunity. Australian companies that partner strategically with global manufacturing leaders position themselves at the forefront of the nation’s clean energy future.

    The question isn’t whether Australia will need transformers, it’s who will deliver them on time, on budget, and to specification.

    Browse our transformer range to explore standard solutions for Australian energy projects. While we showcase key products on our website, we can’t possibly list every configuration and specification available through our manufacturing partnerships.

    Need something specific? Drop us an email at info@edisonic.com.au with your project requirements, and we’ll provide a tailored quote with lead times and pricing that works for your timeline.

    Don’t let the global transformer shortage delay your energy transition. Contact Edisonic Energy today.

    Edisonic Energy is an Australian-owned supplier dedicated to providing high-quality electrical equipment for the nation’s energy sector. We specialise in the supply of components for renewable energy generation, smart grid applications, and critical infrastructure projects.