Power factor correction is the main application for shunt capacitor units in the

power system. The advantage of improved power factor is reduced line and
transformer losses, improved voltage profile, reduced maximum demand, and
improved power quality. The capacitors are installed in a distribution system on
pole-mounted racks, substation banks, and high voltage (HV) or extra-high
voltage (EHV) units for bulk power applications. In industrial systems, the power
factor correction capacitor units are utilized for group or individual loads.
The capacitors are constructed in an enclosure (tank) and are designed to
provide maintenance-free service. The major components of a capacitor unit are
shown in Figure 1.3. A cut view of a typical two-terminal high voltage capacitor
unit is shown in Figure 1.4. The capacitor units are designed and tested
according to industry standards. The ratings are
expressed in kVAR, voltage, and frequency of operation
1.2 CAPACITORS FOR THE POWER INDUSTRY
Power factor correction is the main application for shunt capacitor units in the
power system. The advantage of improved power factor is reduced line and
transformer losses, improved voltage profile, reduced maximum demand, and
improved power quality. The capacitors are installed in a distribution system on
pole-mounted racks, substation banks, and high voltage (HV) or extra-high
voltage (EHV) units for bulk power applications. In industrial systems, the power
factor correction capacitor units are utilized for group or individual loads.
The capacitors are constructed in an enclosure (tank) and are designed to
provide maintenance-free service. The major components of a capacitor unit are
shown in Figure 1.3.
A cut view of a typical two-terminal high voltage capacitor
unit is shown in Figure 1.4. The capacitor units are designed
and tested according to industry standards. The ratings are
expressed in kVAR, voltage, and frequency of operation

1.2.1 The Electrodes

Typically, the electrodes are thin sheets, of the order of 6mm of pure selfannealed aluminum foil. The electrodes are separated by sheets of dielectric and
wound into a roll according to design specifications. Electrical connections are
soldered or welded to the electrodes and terminations are made. Usually two
electrodes are used in every single-phase capacitor.

3. power factor concept

The current required by motors, lights, and computers is made up of real and
reactive components. This concept of a twocomponent current is helpful in
understanding the capacitor current. Loads such as a heater require the supply
of only the real component of current. Some loads, such as an induction motor,
require both real and reactive currents [1].
The real current is that component that is converted by the equipment into
useful work such as production of heat through a heater element. The unit of
measurement of this
current is ampere (A) and of power (voltage_real current) is watts (W).
The reactive current is that component that is required to produce the flux
necessary for the functioning of induction devices. The current is measured in
ampere (A) and the
reactive power (voltage_reactive current) in VARs.
Total Current
The total current is the algebraic sum of the real and reactive current, measured
in amperes. VA represents the voltageampere product. The relation between the
real, reactive, and
power factor improvement
Many utilities prefer a power factor of the order of 0.95. Since industrial
equipment such as an induction motor operates at a much lower power factor,
the overall power factor of the
industrial load is low. In order to improve the power factor, synchronous
condensers or capacitors are used. The synchronous machines, when operated
at leading power factor, absorb reactive power and are called synchronous
condensers. These machines need operator attendance and require periodical
maintenance. Power factor capacitors are
static equipment without any rotating parts and require less maintenance.
Therefore, shunt capacitors are widely used in power factor correction
applications. The shunt capacitors
provide kVAR at leading power factor and hence the overall power factor is
improved.

8.2 FIXED VERSUS SWITCHED CAPACITORS

Shunt capacitors applied to distribution systems are generally
located on the distribution lines or in the substations. The
distribution capacitors may be in pole-mounted racks, padmounted
banks, or submersible installations. The distribution
banks often include three to nine capacitor units connected in
three-phase grounded wye, ungrounded wye, or in delta configuration.
The distribution capacitors are intended for local power
factor correction by supplying reactive power and minimizing
the system losses. The distribution capacitors can be fixed
or switched depending on the load conditions. The following
guidelines apply:
_ Fixed capacitors for minimum load condition.
_ Switched capacitors for load levels above the minimum
load and up to the peak load.
Figure 8.2 shows the reactive power requirements of a
distribution system are shown for a period of 24 hours. Such
base load and peak load conditions are common in most
utilities. Usually, the fixed capacitors satisfy the reactive
power requirements for the base load and the switched
capacitors compensate the inductive kVAR requirements of
the peak load.
8.2.1 Sizing and Location of Capacitors
To obtain the best results, shunt capacitors should be located
where they produce maximum loss reduction, provide better
voltage profile, and are close to the load. When this is not
practical, the following approaches can be used.
_ For uniformly distributed loads, the capacitor can
be placed at two thirds of the distance from the
substation.
_ For uniformly decreasing distributed loads, the
capacitor can be placed at half the distance from the
substation.
_ For maximum voltage rise, the capacitor should be
placed near the load.
Usually, the capacitor banks are placed at the location of
minimum power factor by measuring the voltage, current, kW,
kVAR, and kVA on the feeder to determine the maximum and
minimum load conditions. Many utilities prefer a power factor
of 0.95. The peaks and valleys in the kVAR demand curve make
it difficult to use a single fixed capacitor bank to correct the
power factor to the desired level. If a unity power factor is
achieved during the peak load, then there would be leading
kVAR on the line during off-peak condition, resulting in an
over-corrected condition. Over-correction of power factor can
produce excess loss in the system, similar to the lagging
power factor condition. Overvoltage condition may occur
during leading power factor condition causing damage to the
equipment. Therefore, a leading power factor is not an advantageous
condition. In order to handle such conditions, fixed
capacitors are used to supply the constant kVAR requirements
and switched capacitors are used for supplying the kVAR
for the peak load conditions. Specifically, this will prevent

over-correction of the power factor. Figure 8.2 shows the

selection approach for the fixed and switched capacitors. The
capacitive kVAR required to correct the given power factor to
the desired level can be calculated as shown below.
y1Power factor angle of the given load
y2Desired power factor angle
kWThree-phase real power
kVAR from shunt capacitors, Q1 _ Q2
kVA1 sin y1 _ kVA2 sin y2
The above relation can be expressed in the form of a chart as
shown in Table 8.3. To determine the needed capacitive reactive
power, select the multiplying factor that corresponds to
the present power factor and the desired power factor. Then
multiply this factor by the kW load of the system. Select a
kVAR bank close to the required kVAR.
8.2.2 Effect of Shunt Capacitors on
Radial Feeders
Fixed capacitors can be used to improve the power factor on
radial feeders [3]. The capacitors can be located at the source
or at the load. In a radial system, the capacitor can be located
very close to the load as shown in Figure 8.3. The voltage
profile during light load on the radial system without and
with shunt capacitors is shown in Figure 8.4. The voltage
drop effects are dominant in the radial system when shunt
capacitors are not present. The voltage rise effects are seen
when the capacitor is present and during light load conditions.
The voltage profile along the heavily loaded condition is shown
8.2.3 Switched Capacitors
Switched capacitors provide additional flexibility to control
system voltage, power factor, and losses. Switched capacitors
are usually applied with some type of automatic switching control.
A sensor detects a particular condition and then initiates
a close or trip signal to the circuit breaker connected to the
capacitor bank. A typical automatic capacitor control includes
the following:
_ Voltage: Control of the voltage regulation is a major
consideration.
_ Current: If current magnitude is directly proportional
to the VAR demand.
_ VAR control: VAR demand increases with certain
loads and decreases when the specific load is off.
_ Time switch: To switch on the capacitors during peak
hours and to switch them off during off-peak hours.
_ Temperature: In certain loads such as air conditioners,
the VAR demand goes up when temperature increases.
The fixed capacitor banks are usually left energized on
a continuous basis. In certain loading conditions, selected
capacitor banks can be switched on and off based on seasonal
conditions. Remote switching of capacitor banks is used in
some areas. The capacitor switching is generally performed
using radio signals, a power line carrier, or through telephone

signals.
A typical controller for switching the capacitors automatically
is shown in Figure 8.6. Such a controller is suitable
for pole- and pad-mounted capacitor stations. Switching is
accomplished by using VAR control with voltage override.
This type of controller provides precise and economical control
of capacitor banks as well as dependable operation over years
of service. Such controllers have reliable data recorder capability
because they feature high-level graphics and Windows
software. Their intuitive front panel design and LCD display
make reading from any angle easy. Selection of manual or
automatic settings can be made with the turn of a dial.

8.2.4 Released System Capacity

The power factor correction reduces the kVA demand through
the line, cable, transformer, or generator. This means capacitors
can be used to reduce the equipment overloading of
existing facilities. The released capacity due to power factor
correction is shown by means of an example.
Example 8.3
A 4.16 kV/440 V, three-phase, 300 kVA, delta/wye transformer
is used to supply a load at 0.65 power factor. The transformer
is overloaded by 10%. Analyze this condition and suggest a
suitable mitigation approach through power factor correction.
Solution
kVA300
Power factor0.65
Delivered kVA load when overloaded (300_1.1)
330kVA
cos y0.65, sin y0.7599
Before shunt compensation, kW (330 kVA_0.65)
214.5
kVAR (330 kVA_0.7599)250.8
After power factor correction, kVA300, kW214.5
kVAR
ffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi
3002 _ 214:52
p
210 kVAR
Select a 60 kVAR, three-phase shunt capacitor bank.
New kVA
ffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi
ffiffiffiffiffiffi
214:52 250:8 _ 602
q
287 kVA
New power factor
214:5
287
0:75

By using a 60kVAR shunt capacitor on the 4.16 kV side of the

transformer, the power factor can be improved from 0.65 to
0.75. The load on the transformer will be 287 kVA and hence
the load on the transformer remains within the nominal rating
of 300 kVA.
24.1 INTRODUCTION
In all engineering applications, it is necessary to justify the
installation of new equipment. In weighing the various alternatives,
the economic analysis problems can be classified as
fixed input type, fixed output type, or situations where neither
input nor output is fixed. Whatever the nature of the problem,
the proper economic criteria are to optimize the benefit/cost
ratio. Such an approach may not be applicable to government
projects, where the funds often are allotted based on political
reasoning. The present worth approach is useful for evaluating
the investment, cost of losses, operating cost, and savings [1,2].
24.2 BASIS OF ENGINEERING ECONOMICS
24.2.1 Time Value of Money
When cash flow-related consequences occur in a very short
duration, the income and expenditures can be summed and
the net cash balance can be calculated. When the time span
is longer, the effect of interest on the investment needs to be
calculated. For example, an investment of $100 at 6% interest
for 1 year will result in $6 interest and the total will be $106
after a year. This example illustrates the time value of
money. When considering projects with a useful life of
several years, the time value of money has to be taken into
account.
24.2.2 Present Worth Value of Money
The process of calculating the future value of money in todays
value is called present worth. The present worth P is given by:
PF
1
1 in
__
24:1
where F is the value of money after n years and i is the interest
rate. This concept is illustrated in Figure 24.1. F, n, and i are
known in this problem and P is to be calculated

24.5 ECONOMIC EVALUATIONS

There are many approaches available for the evaluation of
the economic efficiency of one or more project options, including
the following:
Payback method
Rate of return method
Benefitcost ratio analysis
Breakeven analysis
Generally, the following assumptions are made in this type of
analysis:
_ One of the parameters in the present worth analysis is
assumed. It may be either the interest rate or the
useful life.
_ The salvage value is usually taken as zero.
_ Even if the interest rate is provided, it is likely to
change in the future.
_ When comparing products from a superior technology
versus the older technology, the latter will be the
attractive choice. In such cases, the economic advantages
and the technical merits are to be weighted
together.
24.5.1 Payback Period
The payback period is the time required for the benefits of an
investment to equal the cost of the investment.
24.5.1.1 Simple Payback Period
The simple payback period can be calculated as:
Simple payback period
Investment
Benefits per year
24:20
The simple payback period calculation ignores the time value of
money. One of the ways of comparing mutually exclusive economic
aspects is to resolve the consequences to the present
time using the present worth method. The present worth of
the benefits per year is obtained by multiplying the benefits
with the present worth factor given by:
Present worth factor PWF
1
1 in 24:21
where n is the number of years. The cumulative value of
benefits is given by:
where A is the benefits per year. The investment and the
economic returns are expressed on a time-varying basis as
shown in Figure 24.4. For a given project, the calculation of
the payback period using the present worth analysis involves
the evaluation of the present worth factor, benefits per year,
and the present worth of the cumulative benefits.
In order to perform the economic analysis, the effect of
income tax must be included. Sometimes certain tax credits
may be available for energy-related projects and they need
careful consideration. Using this provision, the business can
deduct a percentage of its new equipment purchases as a tax

credit, usually after computing the tax return. At the same

time the basis for the depreciation remains the full cost of
the equipment. The main components taking into account
the tax effects are:
_ Cash flow before taxes
_ DepreciationInvestment_depreciation rate
_ Change in taxable incomeCash flow before taxes_
depreciation
_ Income taxesTaxable income_incremental
income tax
_ After tax cash flowBefore tax cash flow_
income tax
24.5.1.1 Effect of Inflation on the Payback Period
In general, the prices and cost of services change with time and
hence the inflationary trend should be included in the payback