kVA and Maximum Demand for Business Electricity
Understand electricity capacity, maximum demand and why your agreed supply requirements can affect commercial energy costs.
What kVA Means in a Commercial Electricity Context
kVA stands for kilovolt-amperes. It is a unit used to express the apparent power of an electrical supply — that is, the total electrical power being drawn from the network, including both the power that does useful work and the power that is associated with the reactive characteristics of the electrical load.
In a commercial electricity context, kVA is commonly used to describe the capacity of an electricity supply connection. The agreed supply capacity at a business premises is often expressed in kVA, and this figure represents the maximum level of apparent power that the connection is designed to deliver at any given moment.
For many businesses, the distinction between kVA and other units of electrical measurement is primarily relevant when reviewing the capacity of their electricity connection and the associated charges on their energy contract. If you are uncertain about the capacity arrangements at your premises, your electricity supplier, network operator or a qualified electrical engineer can provide guidance specific to your site.
kVA = apparent power; kW = active power
The agreed supply capacity at a commercial premises is typically expressed in kVA. This figure represents the maximum apparent power the connection is designed to deliver — not the same as the kWh consumption used for billing.
The Difference Between kW and kVA in Simple Terms
kW (kilowatts) and kVA (kilovolt-amperes) are related but distinct units. Understanding the difference at a high level can help when reviewing your electricity supply capacity.
This table is a simplified overview for general information purposes. The relationship between kW and kVA depends on the power factor of the electrical load, which varies by site and equipment type. For site-specific advice, consult a qualified electrical engineer.
What Maximum Demand Means
Maximum demand refers to the highest level of electricity consumption recorded at a supply point within a defined measurement period. It represents the peak rate at which electricity is drawn from the network, rather than the total amount consumed over time.
Maximum demand is typically measured in kW or kVA and is recorded over a specific interval — commonly a 30-minute settlement period for half-hourly metered supplies. The highest reading recorded across a billing period or contract year is often referred to as the recorded maximum demand for that period.
Maximum demand is relevant to commercial electricity contracts because it influences the capacity charges applied to the supply. It also provides an indication of whether the agreed supply capacity at the premises is appropriate for the actual level of demand being placed on the connection.
Agreed or Authorised Supply Capacity
The agreed supply capacity — sometimes referred to as the authorised supply capacity or import capacity — is the maximum level of power that the electricity network operator has agreed to make available at a supply point. It is expressed in kVA and is set when the connection is established or subsequently modified.
The agreed capacity is a contractual arrangement between the business and the network operator. It determines the size of the connection infrastructure at the premises and is reflected in the capacity-related charges on the electricity contract. Changing the agreed capacity typically requires an application to the network operator and may involve network reinforcement work, which can take time and incur costs.
It is important to understand that the agreed capacity is distinct from the actual maximum demand recorded at the premises. A business may have an agreed capacity that is higher or lower than its recorded maximum demand, and the relationship between the two has implications for both operational reliability and energy costs.
Well-matched
Agreed capacity broadly reflects actual demand
Potentially over-specified
Agreed capacity significantly exceeds recorded demand — may warrant review
Potentially under-specified
Recorded demand exceeds agreed capacity — operational risk
This diagram is illustrative only. Actual figures vary by site. Always seek professional advice before drawing conclusions or making changes.
How Demand May Be Measured
For half-hourly metered electricity supplies, maximum demand is typically derived from the half-hourly consumption data recorded by the meter. Each 30-minute settlement period provides a consumption reading in kWh, which can be converted to an average kW demand for that period. The highest such reading across a defined period represents the recorded maximum demand.
For supplies that are not currently settled on a half-hourly basis, demand measurement arrangements may differ. The specific metering and measurement arrangements at a supply point depend on the meter type installed and the settlement class of the supply.
Metering arrangements across the UK electricity market are subject to ongoing change under the Market-wide Half-Hourly Settlement (MHHS) programme. Businesses should check with their supplier or meter operator for up-to-date information on the measurement arrangements applicable to their supply.
Why Excessive Capacity May Create Unnecessary Costs
Where the agreed supply capacity at a premises is significantly higher than the actual maximum demand recorded, the business may be paying capacity-related charges for a level of supply that it does not use. These charges are typically applied per unit of agreed capacity, regardless of whether that capacity is actually utilised.
In some cases, the agreed capacity may have been set at a high level to accommodate equipment or processes that are no longer in use, or to allow for expansion that has not materialised. Reviewing whether the agreed capacity remains appropriate for current operational requirements may identify an opportunity to reduce capacity-related costs.
However, any review of agreed capacity should be approached carefully. Reducing capacity without a thorough assessment of current and future site requirements carries the risk of creating operational problems if demand subsequently exceeds the reduced capacity. We strongly recommend that any capacity review is conducted with input from a qualified electrical engineer and the relevant network operator, and that the implications are fully understood before any changes are made.
Why Insufficient Capacity May Create Operational Issues
Where the agreed supply capacity at a premises is lower than the actual maximum demand being placed on the connection, the business may experience operational problems. In some cases, the network operator may apply excess capacity charges when recorded demand exceeds the agreed level. In more serious cases, the supply may be restricted or interrupted.
Insufficient capacity can also limit a business's ability to install new equipment, expand operations or take on additional electrical loads without first applying to the network operator to increase the agreed capacity. This process can take time and may involve costs, so it is worth considering future requirements when reviewing capacity.
If you believe that your current agreed capacity may be insufficient for your operational requirements, we recommend consulting a qualified electrical engineer and contacting your network operator to discuss your options.
The Importance of Professional Review Before Changing Capacity
Changing the agreed supply capacity at a premises is not a straightforward administrative process. It involves an application to the network operator, an assessment of the existing connection infrastructure, and potentially significant work to modify the connection. The process can take weeks or months and may incur costs that need to be weighed against any potential savings from reduced capacity charges.
Before initiating any capacity change, it is essential to have a clear understanding of the current and anticipated future electrical requirements of the premises. This requires a professional assessment by a qualified electrical engineer who can review the site's electrical installation, equipment loads and operational patterns.
Free Energy Help can assist with reviewing the capacity-related charges on your electricity contract and identifying whether a capacity review may be worth exploring. However, we do not provide electrical engineering advice, and any decision to change the agreed capacity at a premises should be made in consultation with qualified professionals.
Any decision to change the agreed supply capacity at a premises should be made in consultation with a qualified electrical engineer and the relevant network operator. Free Energy Help does not provide electrical engineering advice.
Half-Hourly Consumption Data and Capacity
For businesses with half-hourly metered electricity supplies, the half-hourly consumption data provides a detailed record of demand across every 30-minute period of the day. This data makes it possible to identify the maximum demand recorded at the supply point and to understand how demand varies across different times of day, days of the week and seasons of the year.
Analysing half-hourly data can help to assess whether the agreed supply capacity is appropriate for the actual demand profile of the premises. It can also help to identify demand peaks that may be driving capacity charges, and to consider whether operational changes could reduce those peaks.
When obtaining contract quotations for half-hourly metered supplies, suppliers will typically use the half-hourly consumption data to assess the demand profile and price the contract accordingly. Providing accurate data is important to ensure that quotations reflect the actual requirements of the supply.
For a detailed explanation of how half-hourly metering works, see our guide: Half-Hourly Electricity Meters Explained.
Multi-Site Portfolio Reviews
For businesses operating across multiple sites, the capacity arrangements and demand profiles may vary significantly between supply points. Some sites may have agreed capacities that are well-matched to their operational requirements, while others may have capacity levels that warrant review.
A portfolio-level review of capacity arrangements can help to identify sites where the agreed capacity may be significantly higher than the recorded maximum demand, and where a capacity review may be worth exploring. It can also help to ensure that capacity-related charges are being correctly applied across all supply points.
Our team can assist businesses with multi-site portfolios in reviewing the capacity information associated with their supply points and in presenting this information clearly when obtaining contract quotations.
Power Factor — a High-Level Note
Power factor is a measure of how efficiently electrical power is being used at a premises. A power factor of 1.0 (or 100%) means that all of the apparent power drawn from the supply is being converted into useful work. A lower power factor means that a greater proportion of the apparent power is reactive — associated with the characteristics of the electrical load rather than doing useful work.
A low power factor can result in a higher kVA demand for a given kW consumption, which may affect capacity charges and the sizing of the supply connection. Some electricity contracts include provisions related to power factor, and network operators may apply charges where the power factor falls below a specified level.
Power factor is primarily a matter for qualified electrical engineers and is beyond the scope of the energy procurement advice that Free Energy Help provides. If you have concerns about the power factor at your premises, we recommend consulting a qualified electrical engineer. We mention it here only to provide context for the relationship between kW and kVA.
Power factor is a matter for qualified electrical engineers. Free Energy Help does not provide electrical engineering advice. This section is included only to provide context for the relationship between kW and kVA.
How Free Energy Help May Assist With a Capacity Review
Free Energy Help can assist businesses in understanding the capacity-related elements of their electricity contracts and in reviewing the capacity information associated with their supply points. We can help to identify the agreed supply capacity recorded against your MPAN and to present this information clearly when obtaining quotations from our panel of commercial energy suppliers.
Where half-hourly consumption data is available, we can use it to identify the recorded maximum demand at a supply point and to assess whether the agreed capacity appears to be broadly appropriate for the demand profile. If the data suggests that a capacity review may be worth exploring, we will highlight this and recommend that you seek professional advice from a qualified electrical engineer and your network operator.
We do not provide electrical engineering advice, and we do not guarantee that a capacity review will result in cost savings. Our role is to help you understand the commercial aspects of your electricity supply and to obtain competitive quotations from our panel of suppliers. Any decisions about capacity changes should be made in consultation with qualified professionals.
Frequently Asked Questions About kVA and Maximum Demand
Related Guides and Resources
Browse all our commercial energy guides in one place.
Read guideHow half-hourly metering works and why it matters for larger business supplies.
Read guideWhat capacity charges are and how they appear on commercial electricity contracts.
Read guideHow commercial electricity pricing is structured and what affects your contract rate.
Read guideRequest a free, no-obligation business energy quote from our specialist team.
Read guideNeed Help Reviewing Your Electricity Capacity?
Our UK-based specialists can review the capacity-related elements of your electricity contract and obtain quotations from a broad panel of commercial energy suppliers — presenting the full cost breakdown clearly.