This material is posted here with permission of the IEEE. Such permission of the IEEE does not in any way imply IEEE endorsement of any of Brunel University's products or services. Internal or personal use of this material is permitted. However, permission to reprint/republish this material for advertising or promotional purposes or for creating new collective works for resale or redistribution must be obtained from the IEEE by writing to pubs-permissions@ieee.org. Copyright @ 2003 IEEEBeside being a good neighbor and not causing harmonic voltage for others that are connected to your electrical distribution circuit, complying with the legal requirements of IEEE standards 519, and maintaining safe and economical operating environments for electrical equipment within your physical load, there is another very good reason to maintain a good power factor: saving money on your electrical utility bill. Utilities often encourage consumers to maintain a high PF by applying tariff clauses, which penalize consumers for low PF. This letter discusses the topic

Aziz, MMA

El-Zahab, EE

Zobaa, AF

IEEE Transactions on Power Delivery

English

M.M.A. Aziz

E.E.A. El-Zahab

A.F. Zobaa

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Power factor and your electrical utility bill in egypt

Brunel University Research Archive

IEEE TRANSACTIONS ON POWER DELIVERY, VOL. 18, NO. 4, OCTOBER 2003 1567Power Factor and Your Electrical Utility Bill in EgyptM. M. Abdel Aziz, Member, IEEE, E. E. Abou El-Zahab, and A. F. Zobaa, Member, IEEEAbstract—Beside being a good neighbor and not causingharmonic voltage for others that are connected to your electricaldistribution circuit, complying with the legal requirements ofIEEE standards 519, and maintaining safe and economical oper-ating environments for electrical equipment within your physicalload, there is another very good reason to maintain a good powerfactor: saving money on your electrical utility bill. This letterdiscusses the topic.Index Terms—Economics, harmonics, power factor.I. INTRODUCTIONTYPICALLY, both utilities and consumers have incentivesfor improvement. For a utility, improvement re-duces system losses and increases the portion of generation ca-pacity available for productive uses. In addition, it can helpmaintain voltage at desired levels. Consequently, utilities oftenencourage consumers to maintain a high by applying tariffclauses, which penalize consumers for low .In Egypt, utilities impose a penalty in the form of highercharges for customers with contracted loads greater than 500kW whose is less 0.9. From the customer’s point of view,this penalty should be sufficient to motivate the installation ofcorrection equipment. Aside from decreasing the electricbill (or actually resulting in a bonus), other advantages ofcorrection include increasing internal electrical distributionsystem capacity, reducing distributing system losses, andenhancing voltage stability.The following are the possible benefits that can be achievedby correcting consumer’s value.A. Elimination of the PenaltyThe penalty is a multiplier applied to the normal kilowatthour consumption charges. The penalty is based on an annualaverage , calculated from kilowatt hour and kVArh metersreadings as follows:(1)When the average annual is less than 0.9 but greater or equalto 0.7, the penalty is calculated as follows:(2)When the average annual is less than 0.7, the penalty is(3)Manuscript received October 2, 2002.The authors are with the Electrical Power and Machines Department, Facultyof Engineering, Cairo University, Giza 12613, Egypt.Digital Object Identifier 10.1109/TPWRD.2003.817535If the consumer does not correct the , the penalty increasesafter three months to(4)The utility also has the right to discontinue service if the con-sumer does not correct the within another six months.B. Reduction in Contract DemandThe contract demand is the demand that the supplier of elec-tric service agrees to have available for delivery. According tothe Egyptian tariff structure, increasing the may allow theconsumer to reduce his or her contracted power. This results inthe use of a different scale for calculating the cost of kilowatthour consumption. The effect is to use smaller block sizes athigher unit energy costs and larger block sizes for the cheaperrate blocks.C. Bonus Due to OvercorrectedAccording to the Egyptian tariff structure, a bonus is offeredto customers when they maintain an average annual higherthan 0.92 and up to a maximum of 0.95. This can be calculatedby the following:(5)D. Reduction of Internal Distribution System LossesWith active power (kW) held constant, as decreases,the required apparent power (kVA) increases. As a result,the electrical system resistance losses are increased.Although these losses are small (2.5% to 7.5% of a typicalindustrial load’s yearly energy consumption), the effect is muchmore pronounced on a national scale.E. Increased Distribution System CapacityLow cuts down distribution system capacity. Similar ca-pacity improvements are possible with cables, circuit breakers,and other electrical equipment. The capacity of all this equip-ment to provide useful power is reduced by low . In effect,increasing will result in increased capacity in existing elec-trical distribution systems. This can help offset or reduce ex-penses for additional system capacity.F. Enhanced Voltage ProfileWhile not a reason in itself for installing improvementequipment, better voltage stability is usually an additional ben-efit of correction.II. PAYBACK PERIODPayback period is the period of time required for the profit orother benefits from an investment to equal the cost of the invest-0885-8977/03$17.00 © 2003 IEEE1568 IEEE TRANSACTIONS ON POWER DELIVERY, VOL. 18, NO. 4, OCTOBER 2003TABLE ISIMULATED RESULTS OF THE SYSTEM UNDER STUDYment. In all situations, the criterion is to minimize the paybackperiod. The computation of payback period is given by the fol-lowing equation [1]:(6)whereTCOST total cost of the compensator;UAB uniform annual benefit.III. POWER FACTOR CORRECTION PROJECT ECONOMICSTotal electricity costs for the energy customers consist ofthree parts: demand charges, energy charges, and penalties.The contracted power was kW at . Therefore, the de-mand charges were L.E. according to the Egyp-tian tariff. The power is kW at after correction. There-fore, the demand charges are L.E. By reducing con-tracted demand from to , demand charges were reducedby L.E. Excluding the possible reductionin contract demand, the total annual savings resulting from theproject are(7)Including the contract demand reduction, the savings areas (7) with the term is added. Note that thelast term, in (7) is used if . The total investmentrequired for this project is given by the following equation:(8)where and are, respectively, the costs of the capacitorand inductor per kilovolt ampere and considered to be con-stant parameters (60 L.E./kVA). and are, respectively, thevolt-amperes ratings of the capacitor and inductor. If the total in-vestment required for this project, using (8), the expected simplepayback period for the project is years includingcontract demand reduction. Excluding reduction gives a simplepayback period of years.TABLE IIPROJECT ECONOMICS OF CASE STUDYIV. CASE STUDYConsider the system under study [2] as: A three-phase loadof 5100 kW, and 4965 kVAR is connected to a supply buswith voltage 4160-V (2400 line-to-ground), 60-Hz frequencyand 80-MVA short circuit capacity. The contracted power is5100 kW at 0.5464 PF. According to Egyptian tariff, the annualcost per kilowatt is currently L.E. 87.6. The consumptioncharge is 0.1535 L.E./kWh. The simulated results using thesuggested methods in [3] and [4] are given in Table I.Using Section III to perform the project economics, the re-sults are given in Table II.V. CONCLUSIONSImproving power factor resulted in reduction in all three elec-tricity cost components. By reducing contract demand, demandcharges were reduced. Because of the improvement in powerfactor, the maximum kilovolt amperes will decrease; this willreduce the internal losses and, in turn, the energy consump-tion. There are four alternatives for the compensator used: (a)Compensator for minimum transmission loss provided that it isgreater than or equal 90%; (b) compensator for maximum trans-mission efficiency provided that it is greater than or equal 90%;(c) compensator for maximum provided that it is greaterthan or equal 90% and less than or equal 95%; (d) compensatorfor minimum transmission loss constrained by a given cost. Asimple engineering economic analysis using simple payback pe-riod shows that the compensator, which yields most economical, is not necessarily equal with the compensator, which givesminimum transmission loss.REFERENCES[1] D. G. Newman, Engineering Economic Analysis. San Jose, CA 103:Engineering Press, 1980.[2] IEEE Recommended Practices and Requirements for Harmonic Controlin Electrical Power Systems, 1992.[3] M. M. Abdel-Aziz, E. E. Abou El-Zahab, A. M. Ibrahim, and A. F.Zobaa, “Practical considerations on power factor correction for non-linear loads,” in Proc. IEEE Int. Conf. Harmon. Quality Power, Rio deJaneiro, Brazil, Oct. 6–9, 2002.[4] M. M. Abdel-Aziz, E. E. Abou El-Zahab, and A. F. Zobaa, “LC compen-sators based on cost minimization for nonlinear loads,” in Proc. LargeEng. Syst. Conf. Power Eng., Montreal, QC, Canada, May 7-9, 2003, pp.143–147.

Engineering Economic Analysis.

LC compensators based on cost minimization for nonlinear loads,” in

M.M.Abdel-Aziz,E.E.AbouEl-Zahab,andA.F.Zobaa,“LCcompensators based on cost minimization for nonlinear loads,” in

Practical considerations on power factor correction for nonlinear loads,” in

Power factor and your electrical utility bill in Egypt

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Power factor and your electrical utility bill in Egypt

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