Technical Note

Benefits of Power Factor Correction

Most people associate electricity
and energy with kilowatts (kW). In
fact, kW only makes up a part of
the overall energy usage in a home,
commercial building or an industrial
manufacturing plant. In the world of
AC power, there are actually three
types of power:

Apparent Power (measured in

Volt-Amps)
Real Power (measured in Watts)
Reactive Power (measured in
VARs)

The relationship between Apparent

Power and the other two is influenced
by what is called Power Factor
(PF). The PF can be thought of as
a measure of electrical efficiency in
a power system. Numerous benefits
can be derived by providing power
factor correction to a facility.

of kW hours required by a facility.

Additional benefits of reducing line
losses will be discussed later in this
document.

Benefit:
Capacity

Electrical

System

Capacitors in a facility produce

reactive energy that motors require
to produce magnetizing current for
induction motors and transformers.
This reduces the overall current
needed from the power supply. This
translates into reduced loads on both
transformers and feeder circuits.
Capacitors Provide Reactive Power

Benefit: Reduced Utility Bills

Utilities have several different rate
structures that may be used for
billing.

kVA Billing straight charges for

all apparent power consumed
kVAr Billing additional charges
for reactive power
Power Factor Penalty charges
based on the customers actual
power factor
Adjusted kW Demand the real
power demand is adjusted by
a formula and is based on the
customers actual power factor

In all cases, the power factor of a

customer will become a direct or
indirect factor in the utility bill.
Power bills may be reduced by
introducing capacitors to the facility,
which can reduce the need for kVAr
required from the utility. Capacitors
have the added effect of reducing line
losses which can reduce the amount
Elspec Power Quality Solutions

the effects can be harmful.

In facilities with motors, low voltage
reduces motor efficiency and can
cause overheating.
Interference
may be introduced by low voltage
in lighting and other electrical
instruments (i.e. Computers).
Welding plants in particular, may
suffer from voltage drops. The quality
of a weld is directly proportional to
the voltage. These voltage drops can
cause bad welds which translate into
scrap or possible product recalls if
allowed to persist.
Real-time capacitor systems (<1
cycle) have the capability of providing
fast compensation to a dynamic load
that cannot typically be seen by other
conventional capacitor banks. It can
help to raise and stabilize voltage
across a facility by providing reactive
energy, thus improving overall
production.

Benefit: Reduced Line Losses

Reduced loads on transformers can
have a variety of positive impacts
that include but are not limited to:
less maintenance, reduced breaker
trips, and higher full-load capacity.

Benefit:
Levels

Improved

Voltage

Low voltage may be caused by a

lack of reactive energy. Additionally,
voltage drops are often caused by
dynamic load changes. In both cases,

Differences
exist
between
DC
resistances of various conducting
elements and actual apparent AC
resistances of those same elements.
There are many different phenomena
present
in
electrical
systems
which, when combined, can create
substantial energy losses. Reducing
the current used in a facility as well
as properly minimizing harmonics can
have a significant effect on reducing
line losses.
Capacitors can help a system by

In This Document
Read about:
The difference between apparent, real and reactive power
The main areas to benefit from PFC
Examples of PFC savings

www.elspec-ltd.com

Elspec Technical Note

supplying kVAr as needed, therefore
reducing line currents.
However,
extreme care should be taken when
installing capacitors as it is quite
possible to increase harmonics
by installing capacitors.
Installed
capacitor systems ought to have
tuned filters to reduce the effects of
harmonics and resonance.

EXAMPLES OF BENEFITS

must be raised to obtain the desired

capacity.
In our example, we want 20%
additional capacity. Follow the
horizontal line for 20% to the
right until it meets the curved
line that extends from the original
power factor of .80. At the point of
intersection, follow straight down
to the corrected power factor which
shows approximately 0.95.

EXAMPLE #1: Reducing utility

bills based on kVA

Step 3) Calculate the kVAr necessary

to raise the PF accordingly.

EXAMPLE #3: Calculating voltage

rise

Suppose a plant has a 2000 kVA

demand, which requires 1600 kW
and is billed at a rate of $5/kVA
demand. If the power factor could
be increased, the monthly bill would
in turn, decrease.

Old kVAr = SQRT{(kVA2) (kW2)}

With the introduction of capacitors,

a voltage rise can be expected. The
percentage of voltage increase can is
defined below.

Step 1) Determine power current PF

kW 1600
=
= 0.8
kVA 2000

Step 2) Calculate kVAr needed to

raise PF (lets try 0.93)

kW
1600
=
= 1720kVA
newPF 0.93

1200kVAr = SQRT{(20002)
(16002)}

Since

kW

= COS ( )
kVA
And ,
kVAr
TAN ( ) =

kW
Then
kVAr = kW x TAN(),
and = COS-1 (PF),

Step 3) Calculate monthly savings

Therefore:

Req. kVAr = Old kVAr kW x

TAN(COS-1(New PF))

Old kVA New kVA = kVA Saved OR

2000kVA 1720kVA = 280kVA
280kVA x $5/kVA demand = $1400/
mo. saved

EXAMPLE #2: Increasing system

capacity
A facility wants to increase its overall
load by 20%. If a capacitor system is
installed, how big must it be to avoid
putting in a new transformer?

674 kVAr = 1200 1600 x

TAN(COS-1(0.95))
This is the reactive energy necessary
to allow for the increase in system
capacity without installing a new
transformer.

% voltage rise = capacitor kVAr x %

transformer impedance
kVA rating of transformer
For example, lets suppose the
transformer has an impedance of
5.73% and is rated at 3,000kVA.
By installing a 1,200kVAr capacitor
system, the voltage would rise by
~2.29%.
EXAMPLE #4: Calculating reduced
power losses
By installing a PFC system, power
losses can be reduced and calculated
using the following formula:
% Reduction power losses = 100
100 x (Original PF / New PF)2
Suppose a facility has a PF of 0.80
before installing a power factor
correction system which improves
the power facto to 0.95. The power
losses would be reduced by more
than 29%.

Step 1) Calculate the current kW

usage and power factor. (Use the
calculations from Example 1)
Step 2) Determine how high the PF
This document contains Elspec proprietary material. The information contained in this document is believed to be reliable and accurate.

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