Load and demand: it is the overlap, not the sum
Drag the two peaks out of step
Two daily load curves are shown. Drag the handle to move the second load peak in time. When the peaks overlap the composite (gold) rises to double, but spread them apart and the composite maximum settles down. Equipment is sized to this composite maximum.
Building for the sum is too big
If every household in an apartment used its rated power at the same instant, the transformer would have to be enormous. In reality someone cooks while another sleeps, and the peaks scatter across the day. So equipment is sized not to the sum of ratings but to the composite maximum demand that actually appears at once.
Diversity factor · how staggered the peaks
The diversity factor is the sum of the individual maximum demands divided by the composite maximum demand. When the peaks fully overlap the composite equals the sum and the factor is 1; the more they differ in time the smaller the composite and the larger the factor. A large diversity factor means the transformer can be sized that much smaller. That is why the factor rose as the composite peak settled in the curve you dragged.
Demand and load factors · the other two
A single customer does not use the full installed capacity at once either. The demand factor = maximum demand / installed capacity ≤ 1 is that ratio. And how evenly the use spreads over the day is measured by the load factor = average demand / maximum demand. The closer the load factor is to 1, the less the equipment sits idle. Together the demand, diversity and load factors let equipment be sized far below the sum of ratings and used efficiently.
Back to the first screen
When the two peaks were stacked the composite was double (diversity 1), and the more you offset their times the lower the composite maximum and the larger the diversity factor. What the equipment must withstand is not the sum but exactly this composite maximum demand. The diversity, demand and load factors all measure, from different angles, the distance between the "sum of ratings" and "what is actually used at once," and that distance is what lets a transformer be chosen smaller than the sum yet never short.
With the size and ratios of power in hand, the next unit (PW-B4) looks at how that power is measured. Three-phase power needs more than a voltmeter and ammeter; the phase must be seen too. In the two-wattmeter method, which measures three-phase power with two single-phase wattmeters, we follow why the sum of the two readings is the total active power.