5 Benefits of Power Factor Correction That Can Impact Your Utility Bill
Power factor correction can be extremely beneficial. Benefits include everything from reduced demand charges on your power system to increased load carrying capabilities in your existing circuits and overall reduced power system loses. Below you’ll find a list of five benefits in descending order of the potential financial impact on your utility bill.
1. Avoid Power Factor Penalties
Most industrial processing facilities use
a large quantity of induction motors to drive their pumps, conveyors,
and other machinery in the plant. These induction motors cause the power
factor to be inherently low for most industrial facilities. Many
electric utility companies assess a power factor penalty for lower power
factor (usually below 0.80 or 0.85). Some also incentive high power
factor (above 0.95, for example). By adding power factor correction, you
can eliminate the power factor penalty from your bill.
2. Reduced Demand Charges
Many electric utility companies charge
for maximum metered demand based on either the highest registered demand
in kilowatts (KW meter), or a percentage of the highest registered
demand in KVA (KVA meter), whichever is greater. If the power factor is
low, the percentage of the measured KVA will be significantly greater
than the KW demand. Improving the power factor through power factor
correction will therefore lower the demand charge, helping to reduce
your electricity bill.
3. Increased Load Carrying Capabilities in Existing Circuits
Loads drawing reactive power also demand
reactive current. Installing power factor correction capacitors at the
end of existing circuits near the inductive loads reduces the current
carried by each circuit. The reduction in current flow resulting from
improved power factor may allow the circuit to carry new loads, saving
the cost of upgrading the distribution network when extra capacity is
required for additional machinery or equipment, saving your company
thousands of dollars in unnecessary upgrade costs. In addition, the
reduced current flow reduces resistive losses in the circuit.
4. Improved Voltage
A lower power factor causes a higher
current flow for a given load. As the line current increases, the
voltage drop in the conductor increases, which may result in a lower
voltage at the equipment. With an improved power factor, the voltage
drop in the conductor is reduced, improving the voltage at the
equipment.
5. Reduced Power System Losses
Although the financial return from
conductor loss reduction alone is not sufficient to justify the
installation of capacitors, it is sometimes an attractive additional
benefit; especially in older plants with long feeders or in field
pumping operations.
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