Power FactorDefinition. Power factor (PF) is the ratio of the real power to apparent power and represents how much real power electrical equipment utilizes. It is a measure of how effectively electrical power is being used. Power Factor PenaltyWhat is it? Since a utility is paid on the basis of energy consumed (kWh) and the reactive component of current does not register on a kilowatt-hour meter, many utilities impose a power factor penalty or peak demand (kVA) billing element to receive income for the total power they are required to deliver to a given customer. More... |
Power Factor Penalty
Power FactorElectrical power in an AC circuit has three components:
Real power is considered to be the work producing power measured in watts (W), or kilowatts (kW). Real power produces the mechanical output of a motor, for example. Reactive power is not used to do work but is needed to operate equipment and is measured in volt-amperes-reactive (VAR) or kilovar (kVAR). Many industrial loads are inductive such as motors, transformers, fluorescent lighting ballasts, power electronics, and induction furnaces. The current drawn by an inductive load consists of two components:
Magnetizing current is required to sustain the electro-magnetic 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 (see Figure 1).
Apparent Power. In 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. Power factor (PF) is the ratio of the real power to apparent power and represents how much real power electrical equipment utilizes. 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 waveforms. Electrical loads demand more power than they consumeInduction motors convert at most 80 – 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. Stated another way, when a utility serves a facility that has poor power factor, the utility must be capable of supplying higher current levels to serve a given load (see figure 3).
In the simplified diagram above, the total current (load current plus magnetizing current) must be dealt with in the design of the electrical system. The current carrying portions of a power system will require the capacity to carry the total current, not just the real power component. This means that the generators, transformers, cable, circuit breakers, fuses, etc. must be capable of carrying this higher total current. Power Factor PenaltySince a utility is paid on the basis of energy consumed (kWh) and the reactive component of current does not register on a kilowatt-hour meter, many utilities impose a power factor penalty or peak demand (kVA) billing element to receive income for the total power they are required to deliver to a given customer. As the power factor drops the system becomes less efficient (see figure 4). 
As an example, if real power demand at two plants is the same, but one has a power factor of 0.85 and the other has a power factor of 0.70, the utility must provide 21% more current to the second plant to meet the demand. Without a power factor billing element, the utility would receive no more income from the second plant than from the first. From the customer’s point of view, the transformers and cable in the second plant would need 21% more current carrying capacity. 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 their bill. Typically the lower the power factor, the higher the premium. Another way some utilities collect a low power factor premium is to charge for kVA (apparent power) rather than kW (real power). Other utilities provide customers with a credit for high power factor. Generally, utilities impose power factor penalties or apply credits only on their larger commercial and industrial customers. With a diverse range of billing rate structures imposed by electrical utilities, it is imperative to fully understand the billing method employed. How to minimize your power factor penalty using power factor correction.
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