Significance of Load Factor and Diversity Factor
Load factor and diversity factor play an important part in the cost of the supply of electrical energy. Higher the values of load factor and diversity factors, lower will be the overall cost per unit generated.
The capital cost of the power station depends upon the capacity of the power station. Lower the maximum demand of the power station, the lower is the capacity required and therefore lower is the capital cost of the plant. With a given number of consumers the higher the diversity factor of their loads, the smaller will be the capacity of the plant required and consequently the fixed charges due to capital investment will be much reduced.
Similarly higher load factor means more average load or more number of units generated for a given maximum demand & time period. Therefore overall cost per unit of electrical energy generated is reduced. Thus the suppliers should always try to improve the load factor as well as diversity factor by inducing the consumers to use the electrical energy during off peak hours and they may be charged at lower rates for such schemes.
In a hydro-electric power station with water available and a fixed staff for maximum output, the cost per unit generated at 100% load factor would be half the cost per unit at 50% load factor. In a steam power station the difference would not be so pronounced since fuel cost constitutes the major item in operating costs and does not vary in the same proportion as load factor. The cost at 100% load factor in case of this station may, therefore, be about 2/3^{rd} of the cost 50% load factor. For a diesel station the cost per unit generated at 100% load factor may be about 3/4^{th} of the same cost at 50% load factor. From the above discussion it follows that :
A. Hydro-electric power station should be run at its maximum load continuously on all units.
B. Steam power station should be run in such a way that all its running units are economically loaded.
C. Diesel power station should be worked for fluctuating loads or as a stand by.