Electrical Systems: Power Factor Correction

Resistive devices, like electric resistance heaters and incandescent lights transform all the power supplied to the device into heat or useful energy. Inductive devices, like motors, use some of the power supplied to the device to energize the inductive windings and create a magnetic field. This power, called reactive power, is alternately stored and given up by the windings, but is not used to do actual work. When this happens, the line supplying power to the device now carries the actual power used by the device and the reactive power created by the device. Actual power used by the device is measured in kW, reactive power created by induction devices is measured in kVAr, and the apparent power in the supply lines is measured in kVA. The mathematical relationships between these types of power are described by the power triangle shown below. For example, Ps = (Pa2 + Pr2)1/2

Ps = supplied power (kVA) Pr = reactive power (kVAr) Pa = actual power (kW)

The ratio of the actual power consumed by equipment (Pa) to the power supplied to equipment (Ps) is called the power factor. PF = Pa / Ps = kW / kVA = cos Devices which generate/require large amounts of reactive power in relation to actual power consumed have low power factors. Such devices include: Motors HID and fluorescent lights with low PF ballasts Devices which convert AC power to DC power such as: DC drives Welding machines VFDs Induction furnaces

Fully loaded motors generally have a power factor of about 80%. However, if the motor is under loaded, the fraction of reactive power (for the coil) to actual power (for mechanical work) increases and the power factor decreases.

Two potential problems are associated with low power factor. First many utilities have explicit or implicit charges for low power factor. Second, low power factor increases the current, and hence losses, in transformers and the electrical distribution system. These losses cost money and generate excess heat in the electrical distribution system, which may shorten equipment lifetime or cause production shut downs. These potential problems are discussed in the sections that follow. Power Factor Charges Many utilities charge for low power. To measure power factor, the most common type of utility meter measures the total kVAr-hours and kVA-hours over the billing period and calculates the average power factor as: PF = Cos [ ArcSin (kVArh / kVAh) ] The most common methods of charging for low power factor are: 1. Adding a demand penalty when the power factor dips below a set amount (usually 90%) For example: the Cinergy DS rate specifies a demand penalty of: 0.9 - PF kWactual when PF < 0.9 PF If actual power was 100 kW, the power factor was 80%, and the avoided cost of demand were $15.67 /kW, the monthly power factor charge would be: 0.9 - 0.8 100 kW = 12.5 kW 0.8 12.5 kW x $15.67 /kW = $196 2. Basing the demand charge on the supplied power Ps (kVA), rather than the actual power used Pa (kW). For example, assume billing demand is based on kVA rather than kW and the demand charge is $15.00 /kVA-month. If actual demand was 100 kW, the power factor was 80%, the implicit monthly power factor charge would be: kVAPF = 80% = kW / PF = 100 kW / 0.8 kW/kVA = 125 kVA kVAPF = 100% = kW / PF = 100 kW / 1.0 kW/kVA = 100 kVA Penalty = $15 /kVA-month x (KVAPF = 80% - KVAPF = 100%) Penalty = $15 /kVA-month x (125 kVA 100 kVa) = $375 /month

3. Basing part of the overall charge on the reactive power kVAr, which increases as power factor decreases. For example, the Dayton Power and Light General Service Primary Rate specifies a charge of $0.30 per kVAr. The relationship between reactive and actual power is: Pr (kVAr) = Pa (kW) x Tan[Cos-1(PF)] If the actual power was 100 kW and the power factor was 80%, then the power factor charge would be: Pr (kVAr) = 100 (kW) x Tan[Cos-1(0.8)] = 75 kVAr 75 kVAr x $0.30 /kVAr = $23 Power Losses and Excess Heat Generation In addition to possible power factor charges, low power factor also results in excess current in the electrical distribution system upstream from the device. The excess line current results in increased resistive losses, and hence heat gain, in the wiring and electrical distribution equipment. The quantity of line losses associated with low power factor correction can be calculated as follows: LL1 = Line loss before power factor correction LL2 = Line loss after power factor correction % Line Loss Savings = (LL1 LL2) / LL1 LL1 = I21R1 = (kVA1/V1)2 R1 =[(kW1/PF1) / V1]2 R1 = [kW2 R / V2]1 / PF12 Thus: LL2 = [kW2 R / V2]2 / PF22 Assuming everything remains constant except for the power factor: [kW2 R / V2]1 = [kW2 R / V2]2 = [kW2 R / V2] And, % Line Loss Savings = (LL1 LL2) / LL1 % Line Loss Savings = [(kW2 R / V2) / PF12 (kW2 R / V2) / PF22] / (kW2 R / V2)1 / PF12 % Line Loss Savings = [1 / PF12 1 / PF22] / 1 / PF12 % Line Loss Savings = 1 (PF1/ PF2)2 For example, if the power factor were improved from 80% to 90%, the percent line loss savings would be:

% Line Loss Savings = 1 (PF1/ PF2)2 = 1 (80%/ 90%)2 = 21% In addition, the heat generation in upstream electrical distribution equipment would be reduced by 21%. This may or may not be significant. If the electrical circuits are fully loaded and tripping due to excess current, then power factor correction could mitigate this problem. Although percent line loss savings are relatively high, total energy savings are typically small since line losses are small. For example, if line losses are 2% of the total power draw, the total power savings from correcting the power factor would be: 2% x 21% = 0.42% Some manufactures of power factor correction equipment claim that actual losses are much greater than those calculated here, but there is little documented evidence of this in the open literature. Because of these effects, it is generally in the client's interest to maintain a relatively high power factor. To maintain a high power factor: purchase equipment with high power factor ratings, such as high power factor lighting ballasts avoid or replace dramatically oversized motors, since under-loaded motors have low power factors.

If power factor is still a problem, consider adding electrical capacitors. Sizing Capacitors and Estimating Savings Capacitors work by canceling reactive power and current on the primary or upstream side of the capacitor. For example, if a motor operates at 70% power factor, installing a capacitor in the power supply line to the motor would reduce reactive power and line current on the primary side of the capacitor, but would not change the line current on the secondary (motor) side of the capacitor. Thus, installing capacitors directly upstream from low-power-factor loads reduces line current throughout the plants electrical distribution system; whereas installing capacitors directly down stream of the utility meter at the electrical service entrance to the plant, results in power factor correction for utility billing purposes, but will not reduce line losses and overheating throughout the plant.

Primary side of capacitor Capacitor

Secondary side of capacitor Motor

kVAprimary < kVAsecondary PFprimary > PFsecondary

The two primary types of capacitors are oil-filled and gas-filled. Oil-filled capacitors typically last about 60,000 hours and may introduce voltage transients to the downstream equipment. In addition, the oil is potentially flammable and may contain toxins requiring special disposal. Nitrogen and helium gas-filled capacitors last about 120,000 hours, filter voltage transients, are non-flammable and non-toxic. However, the substantially lower cost of oil-filled capacitors make them much more popular than gas-filled capacitors. Capacitors are sized by the amount of reactive power (kVAr) they can cancel. Simple capacitors are sized to compensate for a fixed amount of power. Stepped capacitors have internal controls that adjust the amount of reactive power compensation. Adding too much capacitance can push the system from lagging to leading; for example, adding too much capacitance may change the power factor from 95% to 105%. Although leading power factor does not harm equipment, purchasing excess capacitors is expensive and serves no useful purpose. In addition some meters may read a leading 105% power factor as 95%. If so, you would not get credit for the power factor correction from 95% to 100%. (Other utility meters would read a power factor of 105% as 100%). Because of these reasons, we recommend a conservative approach to power factor correction in which we never overcorrect the power factor past 100%. A simple method to size the amount of capacitor kVAr required is described in the steps that follow: 1. Find kVAr for each month: Pr (kVAr) = Pa (kW) x Tan[Cos-1(PF)] 2. To increase PF as close to 1.0 as possible, recommend additional capacitance equal to minimum monthly kVAr during the past 12 months. This approach minimizes the possibility of adding too much capacitance. 3. Subtract the recommended capacitance (kVAr) from recorded (kVAr) for each month. This difference represents the reactive power (kVAr) if the recommended capacitance were added. 4. Recalculate PF, kVA or kVAr and electricity costs for each month, using the reactive power calculated in the previous step. These costs represent the costs if the recommended capacitance had been added.

5. Calculate savings as the difference between the actual costs and the costs calculated in the previous step. 6. To estimate the implentation cost, we note that the installed cost of capacitors is about about $20 /kVAr - $50 /kVAr, depending on control complexity and size. Examples follow:

AR x: Consider Installing Capacitors to Improve Power Factor

Annual Savings Project Cost CO2 Resource Dollars Capital Other Total (tonne) Electrical Fees None $12,305 $46,000 $46,000 $92,000 ARC: 2.3212.3 Simple Payback 90 months

Analysis Electrical equipment that generates inductive loads, such as motors, creates current that is not in phase with the current supplied by the electric utility. Inductive loads cause the current waveform to lag behind the voltage waveform. This causes a portion of the energy to return to the source, hence leaving less usable power for the equipment. The power associated with this unusable current is called reactive power (kVAr). Because some energy is returned to the source, a higher supply power (kVA) must be generated by the utility in order to meet equipment needs. The ratio of power consumed by equipment (kW) to total power in the electrical lines (kVA) is called the power factor. Most utilities charge for low power factor. Low power factor can be corrected by adding capacitors, which are rated in terms of kVAr.

Power Factor of 1. All Power is usable. Power factor of 0.71. Unusable power is created. (Source: www.wikipedia.com)

The diagram below shows the relationship between the various types of power: supplied power (kVA), reactive power (kVAr), and actual used power (kW). The quantity of each type of power can be calculated using trigonometric relations defined by the power triangle.
kVA (power supplied by utility) kW PF = kVA

kVAr (measure of unused power)

kW (actual power used by machines)

Power factor is ratio of the actual power, kW, and supplied power, kVA. The power factor can be calculated using the following relationships: PF = kW / kVA = cos (tan-1 (kVAr/kW)) (1)

Reactive power is a measure of the unused power in the lines. The reactive power can be calculated using the following relationship: Reactive Power (kVAr) = kW x tan (cos-1 (PF)) (2)

The supplied power (kVA) can be calculated from the reactive power (kVAr) and power factor from the following relationship: kVA = kVAr/sin (cos-1(PF)) (3)

According to your rate structure Large General Service Rate, the power factor charge is about $0.48 per kVAr per month. Your utility company charges for all kVAr in excess of 10% of the billed demand. According to the utility bills, the current power factor averages about 0.85. Savings would be achieved if the power factor were increased from 0.85 to 1.0. Recommendation We recommend considering adding an additional 2,300 kVAr of capacitance to improve the average power factor. Estimated Savings The data listed below is extracted from the utility bills for the years 2006 and 2007. The utility bills summary shows actual demand (kW) and your current lagging reactive demand (kVAr). According to your rate structure, the power factor charge is about $0.48 /kVAr in excess of 10% of billed demand. As indicated in the table below, installing 2,300 kVAr of capacitance would increase your average annual power factor from 0.85 (kW/kVA) to 1.0 (kW/kVA). Savings are calculated as the product of power factor charge ($/kVA) and the current billed reactive demand (kVA).
Meter Reading Date 8/27/07 9/26/07 10/26/07 11/27/07 12/27/07 1/25/08 2/26/08 3/27/08 4/25/08 5/27/08 6/25/08 7/25/08 Tot/Avg Billed Unit Power Metered Actual Actual Lagging Power Proposed Reactive Factor Consumption Demand Reactive Factor Capacitance Demand Charge (kWh/period) (kW) Demand (kVAr) (kW/kVA) (kVAr) (kVAr) ($/kVA) 2,780,825 2,623,534 2,669,789 2,959,728 2,616,545 2,634,931 2,936,662 2,653,735 2,566,901 2,584,217 2,311,135 2,145,290 31,483,292 4,219 4,238 4,185 4,240 4,235 4,235 4,443 4,235 4,235 4,081 4,251 4,217 4,234 2,065 2,057 2,247 2,114 2,138 2,138 2,138 2,138 2,138 2,081 2,136 2,262 2,138 2,538 2,532 2,719 2,590 2,612 2,612 2,624 2,612 2,612 2,540 2,614 2,739 2,612 0.86 0.86 0.84 0.85 0.85 0.85 0.86 0.85 0.85 0.85 0.85 0.84 0.85 $0.48 $0.48 $0.48 $0.48 $0.48 $0.48 $0.48 $0.48 $0.48 $0.48 $0.48 $0.48 $0.48 2,300 2,300 2,300 2,300 2,300 2,300 2,300 2,300 2,300 2,300 2,300 2,300 2,300 New Reactive Demand (kVAr) 238 232 419 290 312 312 324 312 312 240 314 439 312 New Billed New Power Reactive Factor Demand (kW/kVA) (kVAr) 0 0 1 0 0 0 0 0 0 0 0 17 2 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 0.99 1.00 Savings ($/Period) $991 $987 $1,078 $1,015 $1,026 $1,026 $1,026 $1,026 $1,026 $999 $1,025 $1,078 $12,305

The table shows that 1,300 kVAr of additional capacitance would be sufficient to avoid almost all power factor penalties, and the savings from installing additional capacitance would be about $12,305 per year. Hence, we propose adding an additional 2,300 kVAr of capacitance. Estimated Implementation Cost Based on previous experience, simple capacitors can be installed for about $40 per kVAr. Therefore, the estimated implementation cost would be about: (2,300 kVAr x $40 /kVAr) = $92,000 We estimate that about 50% of this is for materials and 50% for labor. Estimated Simple Payback ($92,000 / $12,305 /year) x 12 months = 90 months

AR x: Install Capacitors to Improve Power Factor

Annual Savings Project Cost CO2 Resource Dollars Capital Other Total (tonne) Electrical Fees None $26,537 $10,625 $10,625 $21,250 ARC: 2.3212.3 Simple Payback 10 months

Analysis Electrical equipment that generates inductive loads, such as motors, generates current that is not in phase with the current supplied by the electric utility. The power associated with this unusable current is called reactive power (kVAr). The total power in the line (kVA) includes both the useable (kW) and the reactive power (kVAr). The ratio of power consumed by equipment (kW) to total power in the electrical lines (kVA) is called the power factor. Most utilities charge for low power factor. Low power factor can be corrected by adding capacitors, which are rated in terms of kVAr. The diagram below shows the relationship between the various types of power: total power (kVA), reactive power (kVAr), and actual used power (kW). The quantity of each type of power can be calculated using trigonometric relations defined by the power triangle.
kVA ( total power ) kW PF = kVA kVAr ( reactive unus able power)

kW (actual power used by machines)

Power factor is ratio of the actual power, kW, and total power, kVA. The power factor can be calculated using the following relationships: PF = kW / kVA = cos (tan-1 (kVAr/kW)) The reactive power can be calculated using the following relationship: Reactive Power (kVAr) = kW x tan (cos-1 (PF)) (2) (1)

The total power (kVA) can be calculated from the reactive power (kVAr) and power factor from the following relationship: kVA = kVAr/sin (cos-1(PF)) (3)

In the Utility Analysis section of this report, both on-peak and off-peak power factors less than 0.9 increase the billed demand. The cost for power factor below 0.9 during onpeak is:

= (measured on-peak kW) / (on-peak PF) x 0.9 x (on-peak demand cost) The cost for power factor below 0.9 during off-peak is: = {[(max kW) / off-peak PF x 0.9] - [(measured on-peak kW) / (on-peak PF) x 0.9]} x (off-peak demand cost) Recommendation We recommend considering adding an additional 425 kVAr to improve the average power factor. Estimated Savings The table below shows on-peak and off-peak actual demand (kW), power factor (kW/kVA), supplied power (kVA), reactive power (kVAr), and billing demand (kW). The on-peak and off-peak power factor remains lower than 0.9 for the entire year. Using the rate structure form the Utility Analysis section of this report, the cost for this low power factor is about $26,537 per year.
Meter Reading Date 9/11/06 10/10/06 11/8/06 12/11/06 1/12/07 2/12/07 3/12/07 4/12/07 5/11/07 6/12/07 7/12/07 8/10/07 Tot/Avg Days 32 31 29 33 32 31 28 31 29 32 30 29 367 On-peak Demand (kW) 864 862 842 838 810 842 804 814 823 827 806 845 825 Off-Peak Demand (kW) 860 864 840 838 812 827 806 827 817 827 793 845 830 On-peak Power Factor (kW/kVA) 0.73 0.73 0.73 0.73 0.74 0.76 0.74 0.76 0.74 0.75 0.73 0.75 0.74 Off-Peak Power Factor (kW/kVA) 0.74 0.73 0.73 0.74 0.75 0.74 0.75 0.75 0.73 0.74 0.73 0.74 0.74 On-peak Supplied Power (kVA) 1,187 1,174 1,157 1,145 1,093 1,114 1,093 1,076 1,106 1,107 1,099 1,123 1,123 Off-peak Supplied Power (kVA) 1,157 1,192 1,151 1,130 1,077 1,115 1,076 1,103 1,117 1,112 1,084 1,146 1,122 On-Peak Reactive Power (kVAr) 814 797 793 780 734 729 741 703 739 736 748 740 755 Off-Peak Reactive Power (kVAr) 774 821 787 757 708 747 713 730 762 743 740 775 755 On-Peak Billing Demand (kW) 1,068 1,057 1,041 1,030 984 1,003 984 968 996 997 989 1,011 1,011 Off-Peak Billing Demand (kW) 0 16 0 0 0 1 0 25 10 4 0 21 6 Calculated Power Factor Cost ($/period) $2,603 $2,371 $2,402 $2,322 $2,098 $1,937 $2,177 $1,885 $2,094 $2,165 $2,340 $2,143 $26,537

The on-peak and off-peak reactive power (kVAr) measured at the meter will be reduced by 425 kVAr per month by installing 425 kVAr of capacitance. This is depicted in the table below. 425 kVAr of capacitance will raise the on-peak and off-peak power factor above 0.9. Therefore, the annual power factor cost would be about $0 per year.
Meter Reading Date 9/11/06 10/10/06 11/8/06 12/11/06 1/12/07 2/12/07 3/12/07 4/12/07 5/11/07 6/12/07 7/12/07 8/10/07 Tot/Avg Days 32 31 29 33 32 31 28 31 29 32 30 29 367 On-peak Off-Peak Demand Demand (kW) (kW) 864 862 842 838 810 842 804 814 823 827 806 845 825 860 864 840 838 812 827 806 827 817 827 793 845 830 On-peak Power Factor (kW/kVA) 0.91 0.92 0.92 0.92 0.93 0.94 0.93 0.95 0.93 0.94 0.93 0.94 0.93 Off-Peak Power Factor (kW/kVA) 0.93 0.91 0.92 0.93 0.94 0.93 0.94 0.94 0.92 0.93 0.93 0.92 0.93 On-peak Supplied Power (kVA) 947 939 919 910 867 896 864 860 881 884 868 902 895 Off-peak Supplied Power (kVA) 928 950 915 902 860 888 856 882 883 886 853 914 893 On-Peak Reactive Power (kVAr) 389 372 368 355 309 304 316 278 314 311 323 315 330 Off-Peak Reactive Power (kVAr) 349 396 362 332 283 322 288 305 337 318 315 350 330 On-Peak Billing Demand (kW) 864 862 842 838 810 842 804 814 823 827 806 845 831 Off-Peak Billing Demand (kW) 0 0 0 0 0 0 0 0 0 0 0 0 0 Calculated Power Factor Cost ($/period) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

The annual savings for installing 425 kVAr of capacitance would be about: $26,537 /yr - $0 /yr = $26,537 /yr Estimated Implementation Cost Based on previous experience, simple capacitors can be installed for about $50 per kVAr. Therefore, the estimated implementation cost for installing 425 kVAr of capacitance would be about: 425 kVAr x $50 /kVAr = $21,250 We estimate that about 50% of this is for materials and 50% for labor. Estimated Simple Payback ($21,250 / $26,537 /yr) x 12 months = 10 months

AR x: Install Capacitors to Improve Power Factor

Annual Savings Project Cost CO2 Resource Dollars Capital Other Total (tonne) Electrical Fees None $44,362 $6,750 $6,750 $13,500 ARC: 2.3212.3 Simple Payback 4 months

Analysis Inductive loads, such as motors, generate a reactive current that is not in phase with the current supplied by the utility, hence, it is unusable. The power associated with this reactive current is called reactive power, and is measured in kVAr. The useful power drawn by machines and supplied by the utility is measured in kW. The total power in the lines is the sum of the useful and reactive power and is measured in kVA. The ratio of power consumed by equipment (kW) to power in the lines (kVA) is called the power factor. Most utilities charge for low power factor. Low power factor can be corrected by adding capacitors, which are rated in terms of kVAr. The diagram below shows the relationship between the various types of power. The quantity of each type of power can be calculated using trigonometric relations defined by the power triangle.
kVA ( line power) kW PF = kVA kVAr (reactive power)

kW (actual power used by machines)

The power factor can be calculated using the following relationships: PF = kW / kVA = cos (tan-1 (kVAr/kW)) (1)

Reactive power is a measure of the unused power in the lines. The reactive power can be calculated using the following relationship: Reactive Power (kVAr) = kW x tan (cos-1 (PF)) (2)

The line power (kVA) can be calculated from the reactive power (kVAr) and power factor from the following relationship: kVA = kVAr/sin (cos-1(PF)) (3)

In the utility analysis section of this report, the power factor charge is kVA x 0.9. The utility rate for meter 1 and 3, General Rate DS01 Service at Secondary Distribution

Voltage, the monthly power factor charge for each meter with a power factor less than 0.9 and a billed demand less than 1,000 kW is: Billed kW/mo x 300 kWh/kW x ($0.033076 - $0.020094) kWh + Billed kW x $15.1454 /kW The monthly power factor charge for each meter with a power factor less than 0.9 and a billed demand greater than 1,000 kW is: Billed kW/mo x 300 kWh/kW x ($0.033076 - $0.020094) kWh + Billed kW x $15.1454 /kW According to the utility bills, the current power factors for meter 1 & 3 are less than 0.9 for every month. Savings would be achieved if the power factor were increased to 0.90. Recommendation We recommend considering adding an additional 250 kVAr to Meter 1 and an additional 200 kVAr of capacitance to Meter 3 to improve the average power factor for each meter. Estimated Savings The table below shows meter 1 actual demand (kW) current reactive demand (kVAr), current power factor and the total calculated electrical costs based upon the current rate structure for the previous seven billing periods. The calculated electrical cost for meter 1 is about $290,089 for the last seven billing periods.
Meter 1 Meter Reading Date 10/5/2007 11/5/2007 12/6/2007 1/9/2008 2/7/2008 3/7/2008 4/8/2008 Days 29 31 31 34 29 29 32 Metered Consumption (kWh/period) 240,064 508,236 596,096 678,600 724,944 418,725 482,823 Avg. Daily Consumption (kWh/day) 8,278 16,395 19,229 19,959 24,998 14,439 15,088 Actual Demand (kW) 803 976 1,062 1,256 1,317 853 979 Supplied Power (kVA) 1,005 1,192 1,336 1,549 1,586 1,100 1,243 Current Reactive Demand (kVAr) 604 685 810 907 883 694 765 Power Factor (kW/KVA) 0.80 0.82 0.80 0.81 0.83 0.78 0.79 Power Factor Penality (kW) 102 97 140 138 110 137 139 Billed Demand (kW) 905 1,073 1,202 1,394 1,427 990 1,118 Calculated Total Cost ($/period) $26,402 $39,694 $45,123 $51,166 $53,369 $34,840 $39,495

Tot/Avg

215

3,649,488

16,974

1,035

1,287

764

0.80

863.08

1,158

$290,089

The table below shows meter 1 actual demand (kW) new reactive demand (kVAr), new power factor and the total calculated electrical costs based upon the current rate structure for the previous seven billing periods. The calculated electrical cost for meter 1 by adding 250 kVAr of reactive power would be about $276,063 for the last seven billing periods.

Meter 1 Meter Reading Date 10/5/2007 11/5/2007 12/6/2007 1/9/2008 2/7/2008 3/7/2008 4/8/2008 Days 29 31 31 34 29 29 32 Metered Consumption (kWh/period) 240,064 508,236 596,096 678,600 724,944 418,725 482,823 Avg. Daily Consumption (kWh/day) 8,278 16,395 19,229 19,959 24,998 14,439 15,088 Actual Demand (kW) 803 976 1062 1256 1317 853 979 New Supplied Power (kVA) 878 1084 1180 1395 1463 947 1087 New Reactive Power Demand Factor (kVAr) (kW/KVA) 354 435 560 657 633 444 515 0.91 0.90 0.90 0.90 0.90 0.90 0.90 Power Factor Penality (kW) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Billed Demand (kW) 803 976 1,062 1,256 1,317 853 979 Calculated Total Cost ($/period) $24,469 $37,990 $42,863 $49,312 $52,116 $32,231 $37,082

Tot/Avg

215

3,649,488

16,974

1,035

1,148

514

0.90

0.00

1,035

$276,063

The table below shows meter 3 actual demand (kW) current reactive demand (kVAr), current power factor and the total calculated electrical costs based upon the current rate structure for the previous seven billing periods. The calculated electrical cost for meter 3 is about $94,078 for the last seven billing periods.
Meter 3 Meter Reading Date 10/5/2007 11/5/2007 12/6/2007 1/9/2008 2/7/2008 3/7/2008 4/8/2008 Days 29 31 31 34 29 29 32 Metered Consumption (kWh/period) 73,871 128,492 159,205 183,097 177,265 124,927 147,326 Avg. Daily Consumption (kWh/day) 2,547 4,145 5,136 5,385 6,113 4,308 4,604 Actual Demand (kW) 232 282 362 368 387 309 368 Supplied Power (kVA) 296.3 417.8 494.7 547 548 437 527 Current Reactive Demand (kVAr) 184 309 338 405 387 309 378 Power Factor (kW/KVA) 0.78 0.67 0.73 0.67 0.71 0.71 0.70 Power Factor Penality (kW) 34.67 94.42 83.60 124.39 105.64 84.23 106.57 Billed Demand (kW) 267 376 445 492 493 393 475 Calculated Total Cost ($/period) 7,919 12,084 14,573 16,382 16,169 12,272 14,679

Tot/Avg

215

994,183

4,624

330

467

330

0.71

633.52

420

$94,078

The table below shows meter 3 actual demand (kW) new reactive demand (kVAr), new power factor and the total calculated electrical costs based upon the current rate structure for the previous seven billing periods. The calculated electrical cost for meter 3 by adding 200 kVAr of reactive power would be about $82,226 for the last seven billing periods.
Meter Reading Date 10/5/2007 11/5/2007 12/6/2007 1/9/2008 2/7/2008 3/7/2008 4/8/2008 Days 29 31 31 34 29 29 32 Metered Consumption (kWh/period) 73,871 128,492 159,205 183,097 177,265 124,927 147,326 Avg. Daily Consumption (kWh/day) 2,547 4,145 5,136 5,385 6,113 4,308 4,604 Actual Demand (kW) 232 282 362 368 387 309 368 Supplied Power (kVA) 232.0 301.8 386.9 421.2 430.1 327.4 408.6 New Reactive Power Demand Factor (kVAr) (kW/KVA) 0 109 138 205 187 109 178 1.00 0.93 0.93 0.87 0.90 0.94 0.90 Power Factor Penality (kW) 0.00 0.00 0.00 11.05 0.00 0.00 0.00 Billed Demand (kW) 232 282 362 379 387 309 368 Calculated Total Cost ($/period) $7,259 $10,286 $12,981 $14,224 $14,157 $10,668 $12,650

Tot/Avg

215

994,183

4,624

330

358

132

0.93

11.05

331

$82,226

The annual savings for installing 250 kVAr of capacitance to meter 1 and 200 kVAr of capacitance to meter 3 would be about: ($290,089 - $276,063) / 7 mo + ($94,078 - $82,226) / 7 mo = $25,878 / 7 mo $25,878 / 7 mo x 12 mo/yr = $44,362 /yr Estimated Implementation Cost Based on previous experience, simple capacitors can be installed for about $30 per kVAr. Therefore, the estimated implementation cost for installing 400 kVAr of capacitance would be about: (450 kVAr x $30 /kVAr) = $13,500 We estimate that about 50% of this is for materials and 50% for labor. Estimated Simple Payback ($13,500/ $41,595/year) x 12 months = 4 months

AR I632: TAKE CORRECTIVE ACTIONS TO IMPROVE POWER FACTOR Annual Savings Project Simple Cost Payback Resource CO2 (lb) Dollars Electrical Demand 437 kVA $94,812 $8,000 1 month Analysis and Recommendation Motors and other inductance devices require more power in the lines than they actually consume. Power factor is ratio of power used (kW) to the power that must be supplied in the lines (kVA). The relationship between actual, supplied and reactive power is shown in the figure below. kVA (power supplied by utility) PF = kW kVA

kVAr (measure of unused power)

kW (power used by machines) According to the your electricity bills, the average plant power factor is about 68%. Based on your electric rate structure, you can lower your demand charges by improving power factor. However, you do not want to over correct the power factor to more than 100%. In March 2000, power factor peaked at 74%. Thus, we recommend adding only enough capacitance to raise your power factor to 97% for that month. According to the analysis below, this would be about 400 kVAr of capacitance. Estimated Savings Determining How Much Capacitance to Add The highest power factor registered during the period for which we were supplied with electricity data was for March 2000, when the plant power factor was 74% and the peak power was 594 kW. If the power factor during this month were corrected to 97%, the power factor during the rest of the year would never exceed 97%. Using standard trigonometric relations, the angle theta in the power triangle shown above was about: Cos = kW / kVA = Cos-1 (PF) = Cos-1 (74%) = 42.27 o The reactive power was about: Tan = kVAr / kW kVAr = kW x tan kVAr = 594 kW x tan (42.27) = 540 kVAr

If the power factor were increased to 97%, the reactive power would be about: Cos = kW / kVA = Cos-1 (PF) = Cos-1 (97%) = 14.07 o kVAr = kW x tan kVAr = 594 kW x tan (14.07) = 149 kVAr Thus, the amount of capacitance required to boost your power factor from 74% to 97% during March 2000 would be about: 540 kVAr 149 kVAr = 391 kVAr We recommend adding about 400 kVAr. Calculating Savings According to your electricity bills, the annual average power factor is 68% and the annual average demand is 579 kW. Using standard trigonometric relations, the angle theta in the power triangle shown above is about: Cos = kW / kVA = Cos-1 (PF) = Cos-1 (68%) = 47.156 o The reactive power is about: Tan = kVAr / kW kVAr = kW x tan kVAr = 579 kW x tan (47.156) = 624 kVAr If 400 kVAr of capacitance were added, the average kVAr would be about: 624 kVAr 400 kVAr = 224 kVAr The angle theta would be about: = Tan-1 (kVAr/kW) = Tan-1 (224/579) = 21.150 o The annual average power factor would be about: PF = Cos = Cos (21.150) = 93% The annual average kVA would be about:

kVA = kW / Cos = 579 / Cos(21.150 o) = 621 kVA The billing kVA would be about: 621 kVA x [1 + (0.9 - 93%)] = 602 kVA According to your electricity bills, the annual average power factor is 68% and the annual average kVA is 852 kVA. Thus, without power factor correction the annual average billing kVA would be about: Actual kVA x [1 + (0.9 PF)] = 852 kW x [1 + (0.9 68%)] = 1,039 kVA Thus, the savings from correcting the average power factor to 93% would be about: 1,039 kVA 602 kVA = 437 kVA 437 kVA x $18.08 /kVA-month x 12 months/yr = $94,812 /yr Estimated Implementation Cost According to quotes from other utilities, the total installed cost for simple capacitors is no more than $20 per kVAr. If so, the total implementation cost for installing 400 kVAr of capacitors would be about: 400 kVAr x $20 /kVAr = $8,000 Estimated Simple Payback $8,000 / $94,812 /yr x 12 months/yr = 1 month

AR E061501: TAKE CORRECTIVE ACTIONS TO IMPROVE POWER FACTOR Annual Savings Project Simple Cost Payback Resource CO2 (lb) Dollars Electric Demand 42 kVA $3,669 $2,800 9 months Analysis and Recommendation Motors and other inductance devices require more power in the lines than they actually consume. Power factor is ratio of power used (kW) to the power that must be supplied in the lines (kVA). The relationship between actual, supplied and reactive power is shown in the figure below.

kVA (power supplied by utility) PF = kW kVA

kVAr (measure of unused power)

kW (power used by machines) According to the your electricity bills, the average plant power factor is about 92.4%. Based on your electric rate structure, you can lower your demand charges by improving power factor. However, you do not want to over correct the power factor to more than 100%. In February 2000, power factor peaked at 95%. Thus, we recommend adding only enough capacitance to raise your power factor to 99% for that month. According to the analysis below, this would be about 140 kVAr of capacitance. Estimated Savings During February 2000, the plant power factor was 95% and the peak power was 765 kW. Using standard trigonometric relations, the angle theta in the power triangle shown above was about: Cos = kW / kVA = Cos-1 (PF) = Cos-1 (95%) = 18.195 o The reactive power was about: Tan = kVAr / kW kVAr = kW x tan kVAr = 765 kW x tan (18.195) = 251 kVAr If the power factor were increased to 99%, the reactive power would be about: Cos = kW / kVA = Cos-1 (PF) = Cos-1 (99%) = 8.11 o kVAr = kW x tan kVAr = 765 x tan (8.11) = 109 kVAr Thus, the amount of capacitance required to boost your power factor from 95% to 99% during February 2000 would be about: 251 kVAr 109 kVAr = 142 kVAr

We recommend adding about 140 kVAr. According to the your electricity bills, the average plant power factor is about 92.4%. The average power supplied is about 811 kVA and the average power consumed is about 750 kW. Using these numbers, the average reactive power during the year is about: Cos = kW / kVA = Cos-1 (PF) = Cos-1 (92.4%) = 22.482 o Tan = KVAr / kW kVAr = kW x tan kVAr = 750 x tan (22.482) = 310 kVAr If 140 kVAr of capacitance were added, the average reactive power would be about: kVAr2 = 310 kVAr 140 kVAr = 170 kVAr The average power supplied would be about: 2 = Tan-1(kVAr / kW) = Tan-1(170 / 750) = 12.771 o kVA = kW / Cos 2 = 750 kW / Cos(12.771) = 769 kVA The average reduction in kVA would be about: 811 kVA 769 kVA = 42 kVA Thus, the power factor savings would be about: 42 kVA x $7.28 /kVAmo x 12 mo/yr = $3,669 /yr Estimated Implementation Cost According to quotes from other utilities, the total installed cost for capacitors about $20 /kVAr. If so, the total implementation cost for installing 140 kVAr of capacitors would be about: 140 kVAr x $20 /kVAr = $2,800 Estimated Simple Payback $2,800 / $3,669 /yr x 12 months/yr = 9 months AR E062901: INSTALL 500 KVAR OF CAPACITANCE TO IMPROVE POWER FACTOR Annual Savings Project Simple Cost Payback Resource CO2 (lb) Dollars Power factor charge 500 kVAr $6,000 $7,500 15 months

Analysis Power factor is the ratio of actual power consumed (kW) to the line power supplied (kVA). The utility recorded an annual average power factor of 83% for the electricity service to the plant. Most plants strive to achieve a power factor of 95% or more to reduce demand costs, reduce line losses and allow electrical equipment to run cooler.

kVA (power supplied by utility) kW PF = kVA kW (power used by machines)

kVAr (measure of unused power)

Recommendation We recommend installing at least 500 kVAr of capacitance to raise the plant power factor and save on electricity charges. Estimated Savings Monthly demand, reactive power and power factor from the last year of billing data is shown in the table below.

KW 1,322 1,258 1,243 1,188 1,298 1,181 1,084 1,175 1,231 1,154 1,064 1,163 Tot/Avg/Max

KVAr 522 662 932 984 1,058 886 743 774 763 805 701 767 9,598

PF 93% 89% 80% 77% 78% 80% 83% 84% 85% 82% 84% 84% 82%

The monthly average reactive power varies from a low of 522 kVAr to a high of 1,058 kVAr. Thus, it would be highly unlikely that you would ever over-correct your power factor by installing 500 kVAr of capacitance. If you did, the annual savings would be about:

500 kVAr x $1 /kVAR-mo x 12 mo/yr = $6,000 Estimated Implementation Cost The contract price for installation of simple capacitors varies from $10 to $20 per kVAr. Assuming $15 /kVAr, the implementation cost would be about: 500 kVAr x $15 /kVAr = $7,500 Estimated Simple Payback $7,500 / $6,000 /yr x 12 months/yr = 15 months

AR X: INSTALL CAPACITORS TO IMPROVE POWER FACTOR PF charge Implementation Cost Simple Payback Present 27,048 kVAr/yr Recommended 3,048 kVAr/yr Annual Savings 24,000 kVAr; $7,200 $60,000 8.3 years

Analysis Many types of electrical equipment require that more power be supplied to the equipment than is actually consumed by the equipment. The ratio of power consumed by equipment to power supplied to equipment is called the power factor. Your utility charges you for both how much power your plant actually uses (measured in kW) and for the excess power that the utility was required to supply (a measure of which is kVAr). Thus, low power factor results in higher utility costs. In addition, low power results in overheating in wires, circuit boards and motors. This overheating may cause circuit breakers to shut off the load and interrupt production, and always reduces the lifetime and increases maintenance costs for electrical equipment. It is therefore in your interest to maintain a power factor as close to 100% as is economically feasible. kVA (power supplied by utility) kW PF = kVA kW (power used by machines) The utility recorded an annual average power factor of 79% for the electricity service to the main plant. Most industrial facilities have a power factor of 90% or above. A 79% power factor corresponds to an average of 2,254 kVAr per month, for which the utility charges 30 cents per kVAr. Thus, your average power factor charge is about $676 per month or about $8,114 per year. Installing 2,000 kVAr of capacitors would raise the average monthly power factor to about 99% without ever switching from lagging to leading. The annual utility savings would be about $7,200. Additional savings from longer equipment lifetimes, lower maintenance costs, and avoided production stoppages are difficult to quantify, but are potentially even greater than the utility savings. We think that this is especially critical in your plant where the general difficulty of obtaining spare parts can put machines out of production for extended periods. In addition, your past problem with circuit overheating was worsened by your plants low power factor.

kVAr (measure of unused power)

Recommendation We recommend that you contact your utility about a power quality survey to identify the circuits with the lowest power factors. You could then install corrective capacitance on those circuits or on the main utility feed. In this way, you could raise the power factor into the acceptable range of 90% or greater. This will increase the lifetime and efficiency of your equipment and help minimize production shutdowns. It will also provide modest savings on your utility bill. Our recommendation of 2,000 kVAr represents the maximum capacitance you currently need. Lesser amounts of capacitance would reduce your utility savings accordingly. We estimate the cost of 2,000 kVAr to be approximately $60,000 with simple controls. It could be as high as $100,000 with more complicated controls and features. Based on utility savings alone, the simple payback would be 8.3 years; however, the payback would be shorter if production and equipment maintenance savings were included. Estimated Savings 2,000 kVAr/month x 12 months/year x $0.30 /KVAR = $7,200 Estimated Implementation Cost 2,000 KVAr x $30 /KVAr = $60,000 Estimated Simple Payback $60,000 Simple Payback = = 8.3 years $7,200 / yr

AR X: INSTALL TWO 100-KVAR CAPACITOR BANKS Present Electric Demand (kW) Estimated Implementation Cost: Simple Payback: Recommended Annual Savings 476 kVA; $3,570 $1,000 for installation 4 months

Analysis Your electric demand charge is assessed in terms of kVA, not in kW. This means that the electrical demand charge directly depends on the overall power factor in your plant. A high power factor results in several benefits: lower demand costs, lower voltage drop in the circuit, lower overheating in wiring, and less maintenance. The power factor in the last 12 months varied between 88.8% and 97.9%. Some capacitor banks were already installed on bus bars high above the floor. You also have five 100-kVAR capacitor banks in stock. Recommendations We tried to strike a balance between raising power factor and not to cross to lead power factor. Our analysis indicated that you could install two 100-kVAR capacitor banks to your circuits, preferrably at locations where some low power factor equipment items such

as welders, rectifiers, and HID lamps with low power factor ballasts, are located. In addition, we have learned from the experience in other plants that an audio failure warning system allows for instant detection of capacitor malfunction and thus helps avoid excessive cost penalties if a capacitor bank fails. Without audio failure systems, it could be many months before you discover a capacitor bank failure. Estimated Cost Savings Present The billing demand varied between 829 kVA and 1,382 kVA, totalling 13,654 kVA for the year (August 94 to July 95). After adding two 100-kVAR capacitor banks The annual total billing demand will be lowered from 13,654 kVA to 13,088 kVA for a reduction of 476 kVA Savings 476 kVA x $7.50/kVA = $3,570/year in annual demand cost savings Estimated Implementation Cost $1,000 for installing two 100-kVAR capacitor banks Estimated Simple Payback 4 months AR X: INSTALL CAPACITORS TO RAISE POWER FACTOR Electric Demand (kW) Estimated Implementation Cost: Simple Payback: Present 2,003 kW After AR 0 kW Annual Savings 2,003 kW; $25,819 $30,000 14 months

Analysis and Recommendation Your monthly power factor during the past 12 months was consistently below the 90% level required by your utility company. As a result, a total of 2,003 kW in accumulated power factor related demand penalties were assessed resulting in $25,819 in cost penalties. The power factor varied between 83.3% and 85.7%. This low power factor problem could be corrected by adding capacitor banks at the source of the problem, the electric main, or both. When large electric motors are operated below 50% of their rated capacity, their power factor decreases signficantly. The thermo-mechanical refiner was equipped with a huge 700 hp motor. Other large motors include a 500 hp motor at the hydropulper, 400 hp and a 150 hp motors at wood refiner, and a 100 hp motor at primary screen. These are good candidates to check for under loading. If so, capacitors should be installed at the motor.

500 kVArs of capacitors will be needed to raise the power factor to 90% level. You should consult local heavy equipment vendors to check out motor loading problems and to determine how to position the capacitors between the motors and the electric main. Some capacitors have already been installed, but it is suspected that they were either knocked out by lightning or power surges. If existing capacitors and fuses can be repaired and put back into operation, the net need of new capacitors will be reduced accordingly. Estimated Savings Based on last year's utility bills, we estimate that adding 500 kVAr would save you about $25,819 per year in utility penalties. It would also reduce heat generation and voltage drop, and allow you to decrease the size of wiring. The improvement of power factor from 83% to 91% would result in an 8.8% reduction in electric current, an 8.8% reduction in voltage drop across the circuit, and an 18% reduction in excess heat generation. Estimated Implementation Cost $30,000 for 500 - 600 kVAR capacitors and controls Capacitors installed at the electric main might require a sophisticated controls costing an additional $10,000. Simple Payback 14 months AR X: INSTALL AUDIBLE CAPACITOR FAILURE ALARM Electric Demand Implementation Cost: Simple Payback: Present 123 kW Recommended 0 $150 Annual Savings 123 kW; $1731 $150 1 month

Analysis Recently 200 kVAr of capacitance failed. The visual alarm which should signal when the capacitor bank is not operational also failed. This dual failure caused the power factor of the plant to drop below 90% and cost the company $1,731 in demand penalties. Recommendation Although a properly functioning visual alarm may alleviate such problems in the future, we recommend installing an audible alarm. This type of alarm is almost impossible to ignore and assures that you will be alerted to a capacitor bank failure. Estimated Savings and Implementation Cost Looking backward, we can say that a malfunctioning alarm caused the company to be charged for 123 kW in demand penalties costing $1,731. A functioning audible alarm would have avoided this cost. Audible alarms can be purchased and installed for about $150.

Simple Payback SP = $150 initial cost / $1,731 /yr savings x 12 months/yr = 1 month