**What is Load Factor?**

Load factor is defined as the ratio of average load to the maximum demand for a given period of time. Thus mathematically, load factor may be written as

**Load Factor = Average Load / Maximum Demand**

Load factor is generally calculated for a day, month or year. If we calculate the load factor for a day then average load as well as maximum demand for the day shall be considered. Similarly, load factor for a month or year is calculated considering average load and maximum demand for month or year. As maximum demand is always more than the average load, therefore load factor is always less than 1.

**Significance of Load Factor**

Load factor basically gives an idea of cost of per unit power generation. How?

As Load Factor = Average Load / Maximum Demand

We can write it for a period of T hrs as below,

Load Factor = Average Load xT / Maximum Demand xT

= Units generated in T hrs / Maximum Demand xT

Thus a higher value of load factor means, less maximum demand. Less maximum demand can be catered by a low capacity power plant. As the capacity of plant is less, this means the initial as well as running cost will be low. Thus the cost per unit power generation will be less.

Again, in other sense higher value of load factor means higher Average Load. This means the plant is operating near its rated capacity. Therefore the cost of per unit power generation will be less.

**What is Diversity Factor?**

A power plant normally supplies load to different kinds of consumers. These consumers have their own maximum demand and they differ. The interesting thing is that, individual consumers have their maximum demand at different point of time like one consumer may have maximum demand in morning while the other have in evening. Thus the maximum demand is diversified among the consumers. Therefore it will be wiser to choose a capacity of plant to best fit for the demand at different point of time rather than choosing capacity based on the sum of individual maximum demands. Thus a power plant with lower capacity can fit to supply loads having maximum demands at different point of time. This is why the term Diversity Factor came into picture.

Diversity Factor is defined as the ratio of sum of individual maximum demand to the maximum demand on the plant. Mathematically,

**Diversity Factor = Sum of Individual Maximum Demand / Maximum Demand**

Note that, diversity factor is always more than 1 as Sum of Individual Maximum Demand > Maximum Demand

**What is Capacity Factor?**

Capacity factor is a key parameter in determination of performance of the power plant. More the value of capacity factor better is the performance of plant.

Capacity Factor is defined as the actual electrical energy generated by the plant to the maximum energy that could be generated.

Thus,

**Capacity Factor = Actual Energy Generated / Maximum Energy that could be Generated**

There are two types of power plant; one is Base Load Station and other Peak Load Station. Base Load Stations always operate at its rated capacity irrespective of load on the grid. Thus if we calculate the capacity factor of base load station then ideally it shall be1. But it may happen so that the plant may have been shut down for some maintenance job. Therefore considering this shut down, the capacity factor will not be 100% rather it will be less. For a base load station, the capacity factor for a year varies from 75% to 90 %.

Peak Load stations are those power stations which operate as per the power demand. Thus when the demand is higher, the plant will operate at higher capacity. But as the demand reduces, the peak load station operates at lower capacity. Thus peak load stations operate at varying capacity and therefore capacity factor make sense.

what is the difference between capacity factor & plant load factor of a power plant.

Please read Plant Load Factor to understand the difference.