Economics of Power Factor Correction

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 Understanding Utility Bills
• Kilowatt hours (kWH) – kWH consumption is
measure of electrical energy that has been used
during the billing period. Consist of a unit rate
times accumulated kWH reading from the meter.
• Fuel charge adjustment – Monthly charge
based on the cost of fuel used to produce power
each month. Typically a unit charge times kWH.
• Kilowatt demand – Based on maximum recorded kW demand interval
for the month and represents how much a utility has to provide in terms
of transformers, wire and generation capability. Typically a unit charge
times max kW demand interval for the month.
• Power factor penalties – Charged by some utilities. Usually based on
falling below a minimum PF level. Penalties vary widely among utilities.

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 What is Power Factor?

Inductive loads (motors) require two kinds of

power
Real power(kW)
• Real Power (kW) – that actually performs 𝜃
the work
Reactive power(kvar)
• Reactive Power (kvar) – that maintains the
electromagnetic field Apparent power(kVA)

• Apparent Power (kVA) – total power,

vector sum of kW and kvar
Real power kW
Power Factor is a measure of efficiency = = cos 𝜃
Apparent power kVA
Expressed in a percentage or decimal number (95% or 0.95) and also
with an added “Lag” or “Lead” term.

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PF Correction
kW =1000

kvar=150
kVA =1010

1000 kW kvar=750
load@
load @.99
.8 kVA =1250
lagging
PF PF

600 kvar
Add 600 kvar
capacitor

• Present load at 1000 kW and 80% lagging PF

• Adding capacitors improves PF by providing leading kvar.
• Capacitors cancel the effects of the lagging kvar required by
inductive loads. PF improved to 99%.
• Use capacitors to correct PF to desired value based on utility
penalties

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 Typical PF by Industry and by Operation

Industry Power Factor Operation Power Factor

Auto parts 75-80 Air compressor:
Brewery 76-80 External motors 75-80
Cement 80-85 Hermetic motors 50-80
Chemical 65-75 Metal working:
Coal mine 65-80 Arc welding 35-60
Clothing 35-60 Arc welding with 40-60
Electroplating 65-70 standard capacitors
Foundry 75-80 Resistance welding 40-60
Forge 70-80 Machining 40-65
Hospital 75-80 Melting:
Machine manufacturing 60-65 Arc furnace 75-90
Metalworking 65-70 Inductance furnace 100
Office building 80-90 60Hz
Oil-field pumping 40-60 Stamping:
Paint manufacturing 55-65 Standard speed 60-70
Plastic 75-80 High speed 45-60
Stamping 60-70 Spraying 60-65
Steelworks 65-80 Weaving:
Textile 65-75 Individual drive 60
Tool, die, jig 60-65 Multiple drive 70
Brind 70-75

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HV and LV Recommendations

Low Voltage capacitors

• Applicable for secondary (LV) or primary (HV) metering
• located closest to inductive load for optimum loss reduction and
voltage boost
• Can be switched with the load
• Solutions for harmonic issues can be more complex

Medium Voltage capacitors

• Applicable for primary metering on HV side of the transformer
• Less expensive installed cost per kvar
• Simplifies solutions for harmonic issues

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Medium Voltage Solution Options
• Pole Mounted Rack
• Group fuse protection
• Fixed or switched, single or multi step
• Lowest cost solution
• Open Rack Design
• Individual fuse protection
• Unbalance protection scheme required
• Fixed or switched, single or multi step
• Fenced area required
• Moderate cost solution
• Metal Enclosed
• Current limiting fuses or fusesless designs
• Fixed or switched, single or multi step
• Reduced space requirements, indoor or outdoor
• Fully assembled and tested
• Most costly solution
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 Savings Analysis
Multiplier 0.39523
kVAR charge $2.60
kVAR added 2000
Month Max kW Max kvar Base kvar1 Excess kvar2 Penalty3 New kvar
Mar-12 4020 1961 1589 372 $ 968 -39
Apr-12 3948 3296 1560 1736 $ 4,513 1296
May-12 4011 2391 1585 806 $ 2,095 391
Jun-12 4276 1869 1690 179 $ 465 -131
Jul-12 4426 3536 1749 1787 $ 4,645 1536
Aug-12 4383 3645 1732 1913 $ 4,973 1645
Sep-12 3632 3281 1435 1846 $ 4,798 1281
Oct-12 3937 3344 1556 1788 $ 4,649 1344
Nov-12 3883 2859 1535 1324 $ 3,443 859
Dec-12 3891 2394 1538 856 $ 2,226 394
Jan-13 3724 2891 1472 1419 $ 3,690 891
Feb-13 3616 1446 1429 17 $ 44 -554
Total $ 36,509
1
Base kvar = Max kW x Multiplier
2
Excess kvar = Max kvar - Base kvar
3
Penalty = Excess kvar x kvar Charge

• Power factor penalty = $2.60/kvar for all excess kvar

• Excess kvar = Max kvar - (Max kW for the Billing Period x .39523)
• Annual savings = $36,000
• Possible solution - 2000 kvar metal enclosed bank. Could range from
$30-90K depending on steps. Payback 1-3 years.
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 Harmonics
• Harmonic producing loads can lead to
Fundamental
• Capacitors fuse operations and failed capacitors
• Transformer heating Distorted Waveform 3rd Harmonic

• Motor heating 0
• VFD malfunction
5th Harmonic
• Increased neutral currents
• Common harmonic producing loads
• Power electronic equipment (drives, rectifiers, inverters, computers, etc.)
• Rotating machines (generators, motors)
• Iron saturating devices (transformers)
• Arcing devices (welders, arc furnaces, florescent lights, etc.)
• Harmonic Study should always be performed in conjunction with
power factor correction capacitors when there are significant sources
of harmonics in the system.

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 Engineering Service’s Harmonic Analysis
• Do field measurements
• This is a recommended but optional step to
benchmark system
• Develop system model
• Transformers, lines, loads, harmonic sources,
switches
• Power Flow analysis to determine
• Reactive power needs
• Location of capacitors
• Capacitor bank ratings (steps)
• Harmonic analysis:
• Impact of capacitors on harmonic performance
• Analyze alternatives to comply with harmonic
distortion requirements

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 Total Solutions Process

Pre Installation Installation Support Maintenance

• Utility bill analysis • Acceptance testing • Capacitor testing
• PF correction • Installation • Switch testing
• Harmonic studies • Verify protection • Control testing
• Filter design • Commissioning • Thermography
• Training • Service contracts

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© 2013 Eaton. All rights reserved.
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