Power Factor Correction

Depending upon the rate structure of your electric utility, you may be able to save a substantial amount of money on your electric bill. Pay-back period for an equipment purchase including installation cost may be less than six months to a year. Utility rate structures that account for reactive power consumption, by either a KVA or var demand usage, or a power factor penalty are the ones that can provide this pay-back. Other ancillary benefits to be gained by correcting power factor are, lower energy losses, better voltage regulation and released system capacity. This page explains the fundamentals of power factor and how NEPSI's shunt capacitor banks can benefit you.All electric equipment requires "vars" - a term used by electric power engineers to describe the reactive or magnetizing power required by the inductive characteristics of electrical equipment. These inductive characteristics are more pronounced in motors and transformers, and therefore, can be quite significant in industrial facilities. The flow of vars, or reactive power, through a watt-hour meter will not effect the meter reading, but the flow of vars through the power system will result in energy losses on both the utility and the industrial facility. Some utilities charge for these vars in the form of a penalty, or KVA demand charge, to justify the cost for lost energy and the additional conductor and transformer capacity required to carry the vars. In addition to energy losses, var flow can also cause excessive voltage drop, which may have to be corrected by either the application of shunt capacitors, or other more expensive equipment, such as load-tap changing transformers, synchronous motors, and synchronous condensers.
Figure 1 - Power Factor Triangle

The power triangle shown in figure 1, is the simplest way to understand the effects of reactive power. The figure illustrates the relationship of active (real) and reactive (imaginary or magnetizing) power. The active power (represented by the horizontal leg) is the actual power, or watts that produces real work. This component, is the energy transfer component, which represents fuel burned at the power plant. The reactive power, or magnetizing power, (represented by the vertical leg of the upper or lower triangle) is the power required to produce the magnetic fields to enable the real work to be done. Without magnetizing power, transformers, conductors, motors, and even resistors and capacitors would not be able to operate. Reactive power is normally supplied by generators, capacitors and synchronous motors. The longest leg of the triangle (on the upper or lower triangle), labeled total power, represents the vector sum of the reactive power and real power components. Mathematically, this is equal to:


Electric power engineers often call total power, kVA, MVA, apparent power, or complex power. Some utilities measure this total power, (usually averaged over a 15 minute load period) and charge a monthly fee or tariff for the highest fifteen minute average load reading in the month. This tariff is usually added to the energy charge or kilowatt-hour charge. This type of billing is often called kva demand billing and can be quite costly to an industrial facility. NEPSI's shunt capacitors can save your company money by decreasing your reactive power component supplied by the utility to near zero vars.

The power triangle and the equation above show, that as the reactive power component is decreased by adding shunt capacitors, the total power will also decrease. This is shown by the decreased length of the dashed lines in the power triangle as the reactive power component approaches zero. Therefore, adding capacitors, which will supply reactive power locally, can reduce your total power and monthly kva demand charge.

The angle "phi" in the power triangle is called the power factor angle and is mathematically equal to:

The ratio of the real power to the total power in the equation above (or the cos of phi) is called power factor. As the angle gets larger (caused by increasing reactive power) the power factor gets smaller. In fact, the power factor can vary from 0 to 1, and can be either inductive (lagging) or capacitive (leading). Capacitive loads are drawn down, and inductive loads are drawn up on the power triangle. Most industrials normally operate on the upper triangle (inductive or lagging triangle). As an industrial adds capacitors, the length of reactive (inductive) power leg is shortened by the number of capacitive kvar that were added. If the number of capacitive kvar added exceeds the industrials inductive kvar load, operation occurs on the lower triangle. This is commonly referred to as over compensation.

Utilities charge for reactive power in a countless number of ways. Some utilities charge for kvar demand, while others charge a strait fee for a power factor less than their target. To fully understand the benefits of NEPSI's shunt capacitor and harmonic filters, you must acquire your electric billing rate structure. This rate structure will describe how cost for poor power factor are added to your monthly bills. If you need assistance in calculating your pay-back periods, feel free to contact our nearest factory trained sales representatives or just call Northeast Power Systems, Inc.

Table 1, which contains kilowatt multipliers, can be used to calculate the amount of kvar required to raise your "original power factor" to your "desired power factor". For example, a facility has a peak kilowatt demand of 5000 kW with a power factor of 0.80. The facilities engineer wants to raise its power factor from 0.80 to 0.95. The kW multiplier obtained from table 1 is 0.421. Multiplying this value times the facilities kilowatt demand yields 2105 kvar (0.421 X 5000 = 2105). Therefore, a 2105 kvar capacitor bank would raise the facility's power factor from 0.80 to 0.95.

Table - 1 Kilowatt Multipliers


In addition to the above table, the following web page can be used to calculate the required amount of vars based upon an initial power, desired power factor, and kw demand (Calculation of Required kvar to Raise Power Factor).