How to Maximize the Benefit of PFC Technology
to Utility Customers
Yucheng Zhang*, Sean Burke§, Roger A. Dougal*
* Electrical Engineering
University of South Carolina
§Glacial Energy Holdings, Inc.
Global interest in Power Factor Correction (PFC) is increasing for several reasons. Electric
utilities are beginning to build reactive power consumption into rate policies, not only just for
large industrial customers, but also increasingly for smaller commercial customers [1]. Also,
intensified interest in energy efficiency and reduction of electricity expenses has taken hold in
more modestly-sized companies. At the same time, there is a poor general understanding of how
to most-effectively counter the consumption of reactive power, and the companies most recently
hit by these rate policies, which are ill-equipped to understand exactly how they are being
charged (there are at least three ways, some of which are not direct) and how to mitigate their
consumption. In this article, we will explain the basics of reactive power consumption, why it is
desirable to reduce it, how customers may be charged for it, and the possibility of installing
reactive power compensation equipment to reduce those charges. In addition, we will briefly
explain why reactive power compensation cannot practically reduce the consumption of real
power, and thus why it cannot appreciably reduce the portion of a customer bill that is based on
energy consumption.
I.
Fundamentals of Power Theory and Related Electric Charge Policies
AC electric power is characterized by sinusoidal voltage at 60 Hz frequency. As shown in Figure
1, the component of current that is in phase with the voltage supplies real (or active) power, and
the component that is in phase quadrature (90 degrees out of phase) supplies reactive (or
imaginary) power. The vector sum of real and reactive power is the complex power (also named
as “total power”). An amount of lagging reactive power (the inductive reactive power which has a
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positive value) can be exactly compensated by a similar amount of leading reactive power (the
capacitive reactive power which has a negative value) to yield zero net reactive power.
Reactive power consumed by a load increases the current and hence decreases system capacity –
either in the utility network or on the customer premises. So, reactive power consumption should
be reduced as low as possible. The costs for losses incurred in the power distribution network
caused by reactive power consumption on customer premises is charged to the customer
(generally just large customers nowadays) via a penalty for low power factor, or by direct billing
for reactive power consumption and/or peak kVA demand. Since most of reactive power
consumed is inductive (lagging) in power systems, PFC technology can be realized by inserting
shunt capacitor banks to inject capacitive reactive power to make the power factor angle, γ, close
A)

Active Power (W)
Reactive Power (Var)
T
r (V
we
Po
l
a
ot
Capacitive (Leading) Inductive (Lagging)
to zero. Figure 2 shows the connection of PFCs to utility customers.
Figure 1 Relationships of total power, active
power and reactive power.
Figure 2 Connection of shunt capacitor banks to utility customers to inject
leading reactive power as compensation for consumption of lagging power
factor by customer equipment.
NOT all utility customers need PFC technology: Right now, residential customers are
generally only charged for real power consumption in kilo-watt-hours (kWh), not for reactive
power consumption in kilo-volt-ampere reactive hours (kVar-h). Therefore, they cannot reduce
their electric bills (and certainly not their power consumption) by installing reactive power
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compensation. Commercial and industrial customers, on the other hand, are often charged for
reactive power in one or more of the following three ways:
1)
A penalty due to low power factor (e.g. power factor < 0.85 [1]);
2)
A charge for reactive power consumption in kVar-h;
3)
A charge for reactive power consumption based on a peak kVA demand (e.g. 1.75$ /
kVA [2]).
In these situations, PFC based on inserting capacitor banks can be used, either to avoid a penalty
for low power factor or to the charges on reactive power consumption. Even in these situations,
PFC technology cannot reduce actual power consumption at the customer site, except to very
miniscule extents, unless a customer premises is geographically extensive.
Divided by grid-connected switch devices, there are fixed PFC devices and dynamic PFC devices.
Fixed PFC devices use contactors; dynamic PFC devices use thyristors, one kind of
semiconductor switches. Besides these two, detuned PFC devices are popularly utilized to
eliminate harmonics in current and voltage. It is realized by inserting a small inductor in series
connected to capacitor and based on resonance phenomenon. Detuned PFC devices are purely
capacitive at fundamental frequency and purely inductive seen by harmonics above the resonant
frequency.
Divided by PFC locations, there are central compensation, individual compensation, and hybrid
compensation. Central compensation has a lumped PFC device to compensate the grid as a whole;
individual compensation has distributed individual compensation to each reactive power producer;
hybrid compensation has both the individual compensation, which deals with each large reactive
power producer (like motors), and the central compensation, which takes care of other reactive
power producers (like cables) in distribution network.
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We explicitly note that, as a passive electric device, capacitive PFC technologies cannot decrease
the part of an electric bill charged on real power consumption in watts, but it can reduce the
charges based on peak power consumption (in kVA) in service areas where those charges apply,
especially for customers with low power factor (<0.9). PFC devices can also reduce voltage sag
under high load conditions (voltage sag is generally less than 5% of line voltage) which can
slightly improve the efficiency of equipment and mitigate heat losses to extend motor life such as
induction motors in distribution networks with long cables, but the improvement in efficiency is
very small (typically about 0.2% [3]), so the savings are comparably very small. When there is
larger voltage sag (> 5%), the motors will be disconnected by low-voltage protection according to
IEEE and IEC standards. So, generally speaking, PFC technology cannot be applied as an
approach to save real power consumption (energy). But, as an effective and convenient way to
reduce electric bill, how to optimally utilize PFC devices is a challenge to I&C utility customers
and discussed below.
II.
Optimal Selection of Capacitance for PFC Devices
I&C utility customers should choose an appropriate PFC device in facilities to maximize their bill
savings, which is based on the load profile at customer site. Typically, there are three methods
taken by a qualified electrician to measure load profile, which is constructed from multiple
measurements that are representative of customer site operating conditions [4]:
1) The power meter method is very accurate at measuring power, but requires the use of an
expensive meter and takes only a snap-shot measurement;
2) A recording power meter that can be left at the site for a week is the best way to monitor
the power consumption, so that time variations can be observed, because the costs of
reactive power are based on time integrals of the instantaneous quantities;
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3) The volt-ammeter method is widely used because such meters are less costly and readily
available. Although based on actual measurements, it depends on an estimate of the
power factor (based on a list of customer equipment), thus introducing some uncertainty.
The load profile yielded from these three methods a time series of data is recorded with a time
resolution of several minutes or shorter within the constraint of sampling rate and data package of
communication, to reflect the variation of power flow in a period (usually a week). The greater
the time resolution, the more accurate the optimized capacitance can be. To the second method,
there are compact power analyzers in market which have sampling rates from 1 second to 1 hour
and can store data up to two years with a 128 M external flash card [5].
We cannot choose PFC device based on the data on electric bills: A customer’s bill for
reactive power consumption (in kVAr-h) is based on the time integral of the reactive power
consumption. Generally, both real and reactive power consumptions vary during a day, a week, a
month. On an instantaneous basis, lagging power factor can be exactly compensated by leading
power supplied by a certain shunt capacitance. But for time varying loads, the connection of the
capacitance to the circuit must be controllable. We can illustrate this case by two example
companies, one that draws a constant amount of reactive power day in and day out, another that
draws the power in pulsating fashion as equipment turns on and off throughout the
day/week/month. For example, Figure 3 shows such an example that where the “red” company
and the “blue” company both have the same average reactive power consumption of 10 kVar in
24 hours. When averaged over 24 hours, both have the same average kVAr consumption – 10
kVAr. But the two companies have much different profiles of kVAr consumption, with the
consumption of the red company being steady and the consumption of the blue company being
pulse-wise as equipment turns on and off with 50% duty cycle. In a 60 Hz 240 V ac system, for
the “red” company the compensation capacitance should be 0.46 mF; for the “blue” company, the
compensation capacitance should be 0.92 mF, but is connected half the time. So the capacitances
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of these two cases are totally different even though both companies have the same integrated
kVar-h in this period. And that is why we need the load profile measured by applying the three
methods mentioned above for the capacitance optimization, instead of just an integrated value of
power consumption shown on electric bills.
Figure 3 Comparison between a constant load (red) and a pulsating load (blue) during a day.
An example of a notional small restaurant is applied here to show the benefits of optimized
PFC device. There are a 1 kW load with high power factor (L1) (like lights, heaters, etc.) and two
motor loads with low power factor of 5 kW (M1) and 10 kW (M2) (like air conditioner,
refrigerator, pump, etc.), as shown in Figure 4.
L1
from utility
meter
M1
M2
A Small Restaurant
Figure 4 Structure of a notional small restaurant.
Table 1 Statistical power consumption of a notional restaurant as an example
Load Condition
Only L1
M1 + L1
M2 + L1
Duty Cycle
10 %
50 %
20 %
Real Power
1 kW
6 kW
11 kW
Reactive Power
0.29 kVar
3.75 kVar + 0.29 kVar
7.5 kVar + 0.29 kVar
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M1 + M2 + L1
20 %
16 kW
11.25 kVar + 0.29 kVar
From the one-day load profile in
Figure 5 (a), we can get the statistical
duty cycle of each operation status in
Figure 5 (b). The red columns are
without PFC and the green columns
(a) reactive power data from the one-day load profile
are with optimized PFC. Duty cycles
of real power and reactive power
consumption of load profiles are
calculated by using estimated load
duty cycles and typical power factors
of induction machines.
(b) statistical duty cycle of each operation status derived from (a)
Figure 5 Duty cycle of each reactive power point in the commercial example.
A fixed-capacitance is applied in this example. According to NEMA Standard MG1 Part 14, to
avoid high transient voltage in distribution networks, it is not allowed to over-correct the power
factor (P.F. < 0). This is used as a constraint in PFC controller and capacitance optimization
process.
To deal with the statistical data of duty cycle in optimization program, we found that 1) to avoid
the penalty on low power factor, the optimized capacitance is 0.04 mF for this particular customer;
2) to reduce the total amount of reactive power consumption, the optimized capacitance is
0.18 mF for this customer. With this optimized capacitance, the payback time is about two
months and net save $4300 in three years. The payback in months and savings on electric bill are
shown in Figure 6; 3) to minimize the charge on peak VA demand, the peak KVA demand
reduces from 10.625 kVA to 8.85 kVA with a capacitance of 0.18 mF. It saves 16.7 % on the
charge to this part.
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In this example, the price is $0.05 / kWh
and $1.75 / peak KVA demand. PFC
Cost = $200 +Capacitance *$300 / mF,
where $200 is the cost of the PFC
equipment enclosure and $300 / mF is the
unit cost of capacitance. In real world,
(a) Payback in months versus PFC capacitance
these prices vary depending on electric
companies and PFC manufacturers but
the optimization process can be generally
applied.
(b) 1-year, 2-year, and 3-year cost saving on electric bills
Figure 6 Payback time and savings on electric bill with PFC devices.
Usually, the utility customers pay one or more of these three charges for their reactive power
consumption and low power factor, according to the rate policy of electric companies. Although a
PFC device cannot save real power consumption (in kW) on customer site, PFC devices can
effectively save on the electric bill of customers by reducing their reactive power consumption in
kVar-h, peak power demand in KVA, and increasing power factor of the facility. We should
consider one or more of these charges as constraints in capacitance optimization process.
Besides the notional small restaurant, a nursing home has a PFC bank of 20.1 kVar@480 V under
test with 24-hour cycles and measurement data can be remotely accessed via PowerStudio servers
as shown in Figure 7. To demonstrate the effectiveness of PFC technology in real world, the
measurements of a field test in the nursing home from May 22nd to May 24th, 2012 are presented
in Figure 8. In Figure 8, it is noted that the active power has an average about 26 kW with
relatively small oscillation. When the PFC device is “on”, the average of reactive power
consumption reduces from 18 kVar to 6 kVar and power factor increases from 0.8 to 0.95 above.
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Also the apparent power consumption decreases about 5 kVA. The improvement of PFC
technology on power factor and reactive power compensation is obvious.
Figure 7 Panel of PowerStudio software remotely accessed.
Figure 7 Measurements of power and power factor of a nursing home governed by Glacial Energy Holding, Inc.
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This nursing home does not have large oscillation in active power and reactive consumption so a
central compensation of PFC can effectively increase power factor to a satisfying level (say 0.95
above here) in this case. But there might have time-variable loads, harmonics, and complicated
infrastructure in some objective facilities. In order to optimally utilize PFC devices in the
facilities of different types, a set of general steps to choose appropriate PFC devices are suggested
below.
III.
Suggested Steps to Choose Appropriate PFC Devices for A Particular Utility Customer
To generally apply PFC devices into the facilities of utility customers, the following steps are
suggested to I&C utility customers to choose the most appropriate PFC devices:
1) Checking your electric bill: If there is any charge caused by reactive power
consumption, you may need a PFC device;
2) Contacting your power supplier: electric company can measure the load profile at your
site, calculate the optimized capacitance of PFC, and show you the net savings on your
electric bill in consideration of their charging policy;
3) Choosing an appropriate type of PFC: A) according to IEC standard 60831, if
switching operation is less than 5000 per year, a fixed PFC is recommended to save the
cost. But, for frequently changing loads, a dynamic PFC should be applied to reduce
inrush current into the capacitor and increase the lifetime of PFC devices; B) if the Total
Harmonics Distortion (THD) of current exceeds 10 % or the THD of voltage exceeds 3%,
a detuned PFC should be considered (If THD in current exceeds 50%, an Active Power
Filter (APF) should be installed, rather than a detuned PFC); C) if the load profile has an
evenly-spread duty cycle, a variable-capacitance PFC should be considered.
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Besides these aspects, customers also have options on central compensation, individual
compensation, and hybrid compensation, which depend on the infrastructure of distribution
networks and load characteristics at customer site.
In conclusion PFC device can be optimally utilized for a particular utility customer to maximize
the electric bill savings of utility customers by reducing the charges due to reactive power
consumption and to improve the power system performance by reducing the power loss and
voltage sag in transmission and distribution networks and releasing power system capacity.
Reference:
[1]. “Understanding & Improving Your Power Factor”, DTE Energy,
http://www.dteenergy.com/businessCustomers/largeBusinesses/electric/powerFactor.html.
[2]. “Reactive Power Charge Q&A”, Public Service Company of Oklahoma,
https://www.psoklahoma.com/info/news/ReactivePowerCharge.aspx.
[3]. Rich Schiferl, "An Accurate Method to Determine Electric Motor Efficiency While the Motor
is in Operation", Rockwell Automation,
http://texasiof.ces.utexas.edu/texasshowcase/pdfs/presentations/d5/rschiferl.pdf.
[4]. “Ask an Energy Expert: Optimizing Your Industrial Fan Systems”, US DOE, Energy
Efficiency and Renewable Energy,
http://www1.eere.energy.gov/industry/bestpractices/energymatters/archives/summer2008.htm
l#a285.
[5]. Stephen Underwood, Frangline Jose, Vincent Chan, “Three-Phase Electronic Watt-Hour
Meter Design Using MSP430”, TI Application Report, March 2008.
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