Economic Aspects of Utilizing Electrical Energy | Electrical Engineering SSC JE (Technical) - Electrical Engineering (EE) PDF Download

 Page 1


      Utilisation of Electrical Energy  
 
 Dept. of EEE                                                                                             VEMU IT                                                                                                                                                                                           
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Page 2


      Utilisation of Electrical Energy  
 
 Dept. of EEE                                                                                             VEMU IT                                                                                                                                                                                           
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Utilisation of Electrical Energy  
 
                                                                                                                                                                                                                                                                                        
 
electromagnetic field in a device and creates reactive power. An inductive load draws current that 
lags the voltage, in that the current follows the voltage wave form. The amount of lag is the 
electrical displacement (or phase) angle between the voltage and current. n the absence of 
harmonics, apparent power (also known as demand power) is comprised of (vectorial sum) both 
real and reactive power and is measured in units of volt-amps (VA) or kilovolt-amps (kVA). 
 
Power factor (PF) is the ratio of the real power to apparent power and represents how 
much real power electrical equipment uses. It is a measure of how effectively electrical 
power is being used. Power factor is also equal to the cosine of the phase angle 
between the voltage and current Electrical loads demand more power than they 
consume. Induction motors convert at most 80% to 90% of the delivered power into 
useful work or electrical losses. The remaining power is used 
to establish an electromagnetic field in the motor. The field is alternately expanding and 
collapsing (once each cycle), so the power drawn into the field in one instant is returned to 
the electric supply system in the next instant. Therefore, the average power drawn by the 
field is zero, and reactive power does not register on a kilowatt-hour meter. The 
magnetizing current creates reactive power. Although it does no useful work, it circulates 
between the generator and the load and places a heavier drain on the power source as 
well as the transmission and distribution system. As a means of compensation for the 
burden of supplying extra current, many utilities establish a power factor penalty in their 
rate schedule. A minimum power factor, usually 0.85 to 0.95, is established. When a 
customer’s power factor drops below the minimum value, the utility collects a low power 
factor revenue premium on the customer’s bill. Another way some utilities collect a low 
power factor premium is to charge for kVA (apparent power) rather than kW (real power). 
With a diverse range of billing rate structures imposed by electrical utilities especially for 
large users, it is imperative to fully understand the billing method employed 
 
Improving power factor: 
 
Adding capacitors is generally the most economical way to improve a facility’s power 
factor. While the current through an inductive load lags the voltage, current to a 
capacitor leads the voltage. Thus, capacitors serve as a leading reactive current 
generator to counter the lagging reactive current in a system. 
The expression “release of capacity” means that as power factor of the system is improved, the 
Page 3


      Utilisation of Electrical Energy  
 
 Dept. of EEE                                                                                             VEMU IT                                                                                                                                                                                           
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Utilisation of Electrical Energy  
 
                                                                                                                                                                                                                                                                                        
 
electromagnetic field in a device and creates reactive power. An inductive load draws current that 
lags the voltage, in that the current follows the voltage wave form. The amount of lag is the 
electrical displacement (or phase) angle between the voltage and current. n the absence of 
harmonics, apparent power (also known as demand power) is comprised of (vectorial sum) both 
real and reactive power and is measured in units of volt-amps (VA) or kilovolt-amps (kVA). 
 
Power factor (PF) is the ratio of the real power to apparent power and represents how 
much real power electrical equipment uses. It is a measure of how effectively electrical 
power is being used. Power factor is also equal to the cosine of the phase angle 
between the voltage and current Electrical loads demand more power than they 
consume. Induction motors convert at most 80% to 90% of the delivered power into 
useful work or electrical losses. The remaining power is used 
to establish an electromagnetic field in the motor. The field is alternately expanding and 
collapsing (once each cycle), so the power drawn into the field in one instant is returned to 
the electric supply system in the next instant. Therefore, the average power drawn by the 
field is zero, and reactive power does not register on a kilowatt-hour meter. The 
magnetizing current creates reactive power. Although it does no useful work, it circulates 
between the generator and the load and places a heavier drain on the power source as 
well as the transmission and distribution system. As a means of compensation for the 
burden of supplying extra current, many utilities establish a power factor penalty in their 
rate schedule. A minimum power factor, usually 0.85 to 0.95, is established. When a 
customer’s power factor drops below the minimum value, the utility collects a low power 
factor revenue premium on the customer’s bill. Another way some utilities collect a low 
power factor premium is to charge for kVA (apparent power) rather than kW (real power). 
With a diverse range of billing rate structures imposed by electrical utilities especially for 
large users, it is imperative to fully understand the billing method employed 
 
Improving power factor: 
 
Adding capacitors is generally the most economical way to improve a facility’s power 
factor. While the current through an inductive load lags the voltage, current to a 
capacitor leads the voltage. Thus, capacitors serve as a leading reactive current 
generator to counter the lagging reactive current in a system. 
The expression “release of capacity” means that as power factor of the system is improved, the 
      Utilisation of Electrical Energy  
 
                                                                                                                                                                                                                                                                                        
 
total current flow will be reduced. This permits additional loads to be added and served by the 
existing system. In the event that equipment, such as transformers, cables, and generators, 
may be thermally overloaded, improving power factor may be the most economical way to 
reduce current and eliminate the overload condition. Primarily, the cost-effectiveness of power 
factor correction depends on a utility’s power factor penalties. It is crucial to understand the 
utility’s rate structure to determine the return on investment to improve power factor. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maintaining a high power factor in a facility will yield direct savings. In addition to 
reducing power factor penalties imposed by some utilities, there may be other 
economic factors that, when 
considered in whole, may lead to the addition of power factor correction capacitors that 
provide a 
justifiable return on investment. Other savings, such as decreased distribution losses, 
improved voltage reduction, and increased facility current carrying capacity, are less 
obvious. Though real, 
often these reductions yield little in cost savings and are relatively small in comparison 
to the savings to be gained from reducing power factor penalties. 
 
Harmonic current considerations: 
 
This article intentionally assumes that a facility does not have significant harmonic 
currents present. However, some caution must be taken when applying capacitors in a 
circuit where harmonics are present (true power factor). Although capacitors 
themselves do not generate harmonics, problems arise when capacitors for power 
factor correction improvement are applied 
Page 4


      Utilisation of Electrical Energy  
 
 Dept. of EEE                                                                                             VEMU IT                                                                                                                                                                                           
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Utilisation of Electrical Energy  
 
                                                                                                                                                                                                                                                                                        
 
electromagnetic field in a device and creates reactive power. An inductive load draws current that 
lags the voltage, in that the current follows the voltage wave form. The amount of lag is the 
electrical displacement (or phase) angle between the voltage and current. n the absence of 
harmonics, apparent power (also known as demand power) is comprised of (vectorial sum) both 
real and reactive power and is measured in units of volt-amps (VA) or kilovolt-amps (kVA). 
 
Power factor (PF) is the ratio of the real power to apparent power and represents how 
much real power electrical equipment uses. It is a measure of how effectively electrical 
power is being used. Power factor is also equal to the cosine of the phase angle 
between the voltage and current Electrical loads demand more power than they 
consume. Induction motors convert at most 80% to 90% of the delivered power into 
useful work or electrical losses. The remaining power is used 
to establish an electromagnetic field in the motor. The field is alternately expanding and 
collapsing (once each cycle), so the power drawn into the field in one instant is returned to 
the electric supply system in the next instant. Therefore, the average power drawn by the 
field is zero, and reactive power does not register on a kilowatt-hour meter. The 
magnetizing current creates reactive power. Although it does no useful work, it circulates 
between the generator and the load and places a heavier drain on the power source as 
well as the transmission and distribution system. As a means of compensation for the 
burden of supplying extra current, many utilities establish a power factor penalty in their 
rate schedule. A minimum power factor, usually 0.85 to 0.95, is established. When a 
customer’s power factor drops below the minimum value, the utility collects a low power 
factor revenue premium on the customer’s bill. Another way some utilities collect a low 
power factor premium is to charge for kVA (apparent power) rather than kW (real power). 
With a diverse range of billing rate structures imposed by electrical utilities especially for 
large users, it is imperative to fully understand the billing method employed 
 
Improving power factor: 
 
Adding capacitors is generally the most economical way to improve a facility’s power 
factor. While the current through an inductive load lags the voltage, current to a 
capacitor leads the voltage. Thus, capacitors serve as a leading reactive current 
generator to counter the lagging reactive current in a system. 
The expression “release of capacity” means that as power factor of the system is improved, the 
      Utilisation of Electrical Energy  
 
                                                                                                                                                                                                                                                                                        
 
total current flow will be reduced. This permits additional loads to be added and served by the 
existing system. In the event that equipment, such as transformers, cables, and generators, 
may be thermally overloaded, improving power factor may be the most economical way to 
reduce current and eliminate the overload condition. Primarily, the cost-effectiveness of power 
factor correction depends on a utility’s power factor penalties. It is crucial to understand the 
utility’s rate structure to determine the return on investment to improve power factor. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maintaining a high power factor in a facility will yield direct savings. In addition to 
reducing power factor penalties imposed by some utilities, there may be other 
economic factors that, when 
considered in whole, may lead to the addition of power factor correction capacitors that 
provide a 
justifiable return on investment. Other savings, such as decreased distribution losses, 
improved voltage reduction, and increased facility current carrying capacity, are less 
obvious. Though real, 
often these reductions yield little in cost savings and are relatively small in comparison 
to the savings to be gained from reducing power factor penalties. 
 
Harmonic current considerations: 
 
This article intentionally assumes that a facility does not have significant harmonic 
currents present. However, some caution must be taken when applying capacitors in a 
circuit where harmonics are present (true power factor). Although capacitors 
themselves do not generate harmonics, problems arise when capacitors for power 
factor correction improvement are applied 
      Utilisation of Electrical Energy  
 
                                                                                                                                                                                                                                                                                        
 
to circuits with nonlinear loads that interject harmonic currents. Those capacitors may lower 
the resonant frequency of that circuit enough to create a resonant condition. Resonance is a 
special condition in which the inductive reactance is equal to the capacitive reactance. As 
resonance is approached, the magnitude of harmonic current in the system and capacitor 
becomes much larger than the harmonic current generated by the nonlinear load. The current 
may be high enough to blow capacitor fuses, create other “nuisance” problems, or develop into 
a catastrophic event. A solution to this problem is to detune the circuit by changing the point 
where the capacitors are connected to the circuit, changing the amount of applied capacitance, 
or installing passive filter reactors to a capacitor bank, which obviously increases its cost. Use 
of an active harmonic filter may be another solution. 
 
Capacitor bank considerations and associated costs: 
 
The selection of the type of capacitor banks and their location has an impact on the cost of 
capacitor banks. More difficult than determining the total capacitance required is deciding 
where the capacitance should be located. There are several factors to consider, including: 
Should one large capacitor bank be used, or is it better to add small capacitors at 
individual loads? Should fixed or automatically switched capacitors be employed? In 
general, since capacitors act as a kVAR generator, the most efficient place to install them 
is directly at an inductive load for which the power factor is being improved. 
 
Fixed capacitor location schemes include: 
 
This will generally improve losses, although it is not an optimal solution .Distributing 
the capacitors using the motor sizes and the NEMA tables as a guide. This solution 
does not reflect the need for more released capacity, if this is a goal. Capacitors sized 
for small loads are often proportionally much more expensive than larger fixed 
capacitors, primarily because of installation costs. 
 
Capacitor switching options include: 
 
Switching a few of the capacitors with larger motors is an option. The capacitors may be 
physically installed either directly connected to the motor or through a contactor on the motor 
control center that is tied in with the motor control. If the motors are large enough to use 
capacitors of the same size as were being considered for the fixed capacitor scheme, little 
additional cost is incurred for installing them on the motors. Where the economy is lost is when 
Page 5


      Utilisation of Electrical Energy  
 
 Dept. of EEE                                                                                             VEMU IT                                                                                                                                                                                           
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Utilisation of Electrical Energy  
 
                                                                                                                                                                                                                                                                                        
 
electromagnetic field in a device and creates reactive power. An inductive load draws current that 
lags the voltage, in that the current follows the voltage wave form. The amount of lag is the 
electrical displacement (or phase) angle between the voltage and current. n the absence of 
harmonics, apparent power (also known as demand power) is comprised of (vectorial sum) both 
real and reactive power and is measured in units of volt-amps (VA) or kilovolt-amps (kVA). 
 
Power factor (PF) is the ratio of the real power to apparent power and represents how 
much real power electrical equipment uses. It is a measure of how effectively electrical 
power is being used. Power factor is also equal to the cosine of the phase angle 
between the voltage and current Electrical loads demand more power than they 
consume. Induction motors convert at most 80% to 90% of the delivered power into 
useful work or electrical losses. The remaining power is used 
to establish an electromagnetic field in the motor. The field is alternately expanding and 
collapsing (once each cycle), so the power drawn into the field in one instant is returned to 
the electric supply system in the next instant. Therefore, the average power drawn by the 
field is zero, and reactive power does not register on a kilowatt-hour meter. The 
magnetizing current creates reactive power. Although it does no useful work, it circulates 
between the generator and the load and places a heavier drain on the power source as 
well as the transmission and distribution system. As a means of compensation for the 
burden of supplying extra current, many utilities establish a power factor penalty in their 
rate schedule. A minimum power factor, usually 0.85 to 0.95, is established. When a 
customer’s power factor drops below the minimum value, the utility collects a low power 
factor revenue premium on the customer’s bill. Another way some utilities collect a low 
power factor premium is to charge for kVA (apparent power) rather than kW (real power). 
With a diverse range of billing rate structures imposed by electrical utilities especially for 
large users, it is imperative to fully understand the billing method employed 
 
Improving power factor: 
 
Adding capacitors is generally the most economical way to improve a facility’s power 
factor. While the current through an inductive load lags the voltage, current to a 
capacitor leads the voltage. Thus, capacitors serve as a leading reactive current 
generator to counter the lagging reactive current in a system. 
The expression “release of capacity” means that as power factor of the system is improved, the 
      Utilisation of Electrical Energy  
 
                                                                                                                                                                                                                                                                                        
 
total current flow will be reduced. This permits additional loads to be added and served by the 
existing system. In the event that equipment, such as transformers, cables, and generators, 
may be thermally overloaded, improving power factor may be the most economical way to 
reduce current and eliminate the overload condition. Primarily, the cost-effectiveness of power 
factor correction depends on a utility’s power factor penalties. It is crucial to understand the 
utility’s rate structure to determine the return on investment to improve power factor. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maintaining a high power factor in a facility will yield direct savings. In addition to 
reducing power factor penalties imposed by some utilities, there may be other 
economic factors that, when 
considered in whole, may lead to the addition of power factor correction capacitors that 
provide a 
justifiable return on investment. Other savings, such as decreased distribution losses, 
improved voltage reduction, and increased facility current carrying capacity, are less 
obvious. Though real, 
often these reductions yield little in cost savings and are relatively small in comparison 
to the savings to be gained from reducing power factor penalties. 
 
Harmonic current considerations: 
 
This article intentionally assumes that a facility does not have significant harmonic 
currents present. However, some caution must be taken when applying capacitors in a 
circuit where harmonics are present (true power factor). Although capacitors 
themselves do not generate harmonics, problems arise when capacitors for power 
factor correction improvement are applied 
      Utilisation of Electrical Energy  
 
                                                                                                                                                                                                                                                                                        
 
to circuits with nonlinear loads that interject harmonic currents. Those capacitors may lower 
the resonant frequency of that circuit enough to create a resonant condition. Resonance is a 
special condition in which the inductive reactance is equal to the capacitive reactance. As 
resonance is approached, the magnitude of harmonic current in the system and capacitor 
becomes much larger than the harmonic current generated by the nonlinear load. The current 
may be high enough to blow capacitor fuses, create other “nuisance” problems, or develop into 
a catastrophic event. A solution to this problem is to detune the circuit by changing the point 
where the capacitors are connected to the circuit, changing the amount of applied capacitance, 
or installing passive filter reactors to a capacitor bank, which obviously increases its cost. Use 
of an active harmonic filter may be another solution. 
 
Capacitor bank considerations and associated costs: 
 
The selection of the type of capacitor banks and their location has an impact on the cost of 
capacitor banks. More difficult than determining the total capacitance required is deciding 
where the capacitance should be located. There are several factors to consider, including: 
Should one large capacitor bank be used, or is it better to add small capacitors at 
individual loads? Should fixed or automatically switched capacitors be employed? In 
general, since capacitors act as a kVAR generator, the most efficient place to install them 
is directly at an inductive load for which the power factor is being improved. 
 
Fixed capacitor location schemes include: 
 
This will generally improve losses, although it is not an optimal solution .Distributing 
the capacitors using the motor sizes and the NEMA tables as a guide. This solution 
does not reflect the need for more released capacity, if this is a goal. Capacitors sized 
for small loads are often proportionally much more expensive than larger fixed 
capacitors, primarily because of installation costs. 
 
Capacitor switching options include: 
 
Switching a few of the capacitors with larger motors is an option. The capacitors may be 
physically installed either directly connected to the motor or through a contactor on the motor 
control center that is tied in with the motor control. If the motors are large enough to use 
capacitors of the same size as were being considered for the fixed capacitor scheme, little 
additional cost is incurred for installing them on the motors. Where the economy is lost is when 
      Utilisation of Electrical Energy  
 
                                                                                                                                                                                                                                                                                        
 
the capacitors are placed on several small motors. There is relatively little difference in 
installation costs for large and small 480-V units. 
The second switching option is to consider an automatic power factor controller 
installed in the Capacitor bank. This will switch large capacitor banks in small steps (25 
through 50 is common) 
to follow the load. Automatic power factor capacitor banks should be installed at the 
motor control center rather than on the main bus, if optimal distribution loss is a goal. 
The economics of purchasing, installing 
 
Improving Load Factor Your company could increase efficiency by improving load factor. 
Increasing your load factor will reduce the average unit cost (demand and energy) of the 
kWh. Depending on your situation, improving your load factor could mean substantial 
savings. The load factor corresponds to the ratio between your actual energy consumption 
(kWh) and the maximum power recorded (demand) for that period of time. 
 
WHAT IS LOAD FACTOR? Consumption (kWh) during the period x 100 /Demand 
(kW) x hours in that period 
By analyzing your load profile and your needs, you may be able to improve your load 
factor by doing the following:. 
 
Demand Reduction Reduce demand by distributing your loads over different times or 
by installing load management systems. 
Increase Production Keeping the demand stable and increasing your consumption is often a 
cost-effective way to increase production while maximizing the use of your power. In both 
cases, the load factor will improve and therefore reduce your average unit cost per kWh. 
 
The peak demand 
 
The peak demand of an installation or a system is simply the highest demand that has occurred 
over a specified time period (Gönen 2008). Peak demand is typically characterized as annual, daily 
or seasonal and has the unit of power. Peak demand, peak load or on-peak are terms used in 
energy demand management describing a period in which electrical power is expected to be 
provided for a sustained period at a significantly higher than average supply level. Peak demand 
fluctuations may occur on daily, monthly, seasonal and yearly cycles. For an electric utility 
company, the actual point of peak demand is a single half-hour or hourly period which