Think about what happens when you push someone on a swing. You start pushing when they are swinging backwards, but they don’t start swinging forwards immediately. First they slow down, then accelerate in the other direction. The swinging is an oscillation, and the swing is out of phase with the pushing. This means that when the push is at a maximum (top of the swing) the speed is at a minimum (the person is momentarily stationary at the top of the swing).
When talking about power factor we are talking about AC electricity – the current and voltage are oscillating backwards and forwards like the person on a swing. The current is like the speed of the person, and the voltage is like the amount of pushing that you are doing.
The reason the person doesn’t change direction immediately when you start pushing is that they have momentum, because they have mass. An electric circuit can also have momentum. Electric motors in particular (a major load in industrial applications) have a property called inductance which resists any change in current (just like mass resists change in speed). Inductance is caused by magnetic fields generated by coils of wires carrying current.
If a circuit has lots of inductance then it will resist changes in current, so as the voltage oscillates the current will lag behind. The amount of lag is the power factor.
Alternatively a circuit can have lots of capacitance which is sort of the opposite of inductance. Electronics have capacitance typically. A capacitive circuit will have current actually ahead of voltage, which gives a negative power factor.
This all matters because it is only the in-phase part of the current and voltage that consume power (called real power). The out of phase part adds to the current oscillating backwards and forwards and so affects losses in transmission lines, but doesn’t consume power (this is called imaginary power). If you are familiar with work equalling force multiplied by distance then you can see that pushing someone on a swing requires no work at the very top of the swing when they are momentarily not moving, despite this being the moment that you are pushing hardest.
You can correct power factor; a factory with lots of motors may have a bank of capacitors to reduce the power factor and so the load on their distribution infrastructure (and in some jurisdictions I believe industrial users pay for the imaginary as well as real part of the power they receive).
Edit: thanks for all the kind words.
Analogies like this are really useful because they are not only helpful illustrations; the underlying mathematics of oscillating systems is identical regardless of whether they are mechanical or electrical. The way you adjust the position of a weight on a clock pendulum to change its frequency is exactly equivalent to the way you turn the dial of a traditional radio and adjust a variable inductor and so change the frequency of station it picks up.
In fact an old lecturer of mine invented a component used in formula 1 cars called an inerter by looking at suspension systems and realising that they were missing a component that was analogous to an inductor in electrical circuits.
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