Some Cost Implications of Electric Power Factor Correction and Load Management
SOME COST IMPLICATIONS OF ELECTRIC POWER FACTOR CORRECTION AND LOAD MANAGEMENT
BY
HERCULES VISSER
Dissertation submitted in partial fulfilment of the requirements for the degree
Magister Philosphiae in Engineering Management
In the
Faculty of Engineering
at the
Rand Afrikaans University
Supervisor: Prof. J.H. Pretorius Co. Supervisor: Prof. L. Pretorius
May 2001 ACKNOWLEDGEMENTS
I would like to thank my Creator for the ability and guidance He gave me during this study.
Without His support, this work would not have been possible.
What shall I render to the Lord
For all His benefits toward me?
Ps. 116:12
Then I would like to thank various people for their direct and indirect contributions to this
research study:
My wife, Ria, for her encouragement and support.
Prof J.H. Pretorius and Prof L. Pretorious for the privilege to study under them
and for their patience and wise guidance.
"Everything should be made as simple as possible, but not simpler."
Albert Einstein. 1879 - 1955 SUMMARY
Presently, ESKOM is rated as the fifth largest utility in the world that generates and distributes electricity power to their consumers at the lowest price per kilowatt-hour
(kW.h). As a utility, ESKOM is the largest supplier of electrical energy in South Africa and is currently generating and distributing on demand to approximately 3000 consumers.
This represents 92% of the South African market. ESKOM was selected as the utility supplying electrical energy for the purpose of this study.
ESKOM's objective is to provide the means and systems by which the consumer can be satisfied with electricity at the most cost-effective manner. In order to integrate the consumers into these objectives, ESKOM took a decision in 1994 to change the supply tariff from active power (kW) to apparent power (kVA) for a number of reasons:
To establish a structure whereby the utility and the consumer can control the
utilisation of electrical power supply to the consumer.
To utilise demand and control through power factor correction and
implementation of load management systems.
To identify some cost implications of electrical power factor correction and load
management.
Consumers with kW maximum demand tariff options had little or no financial incentives to improve their low power factor (PF) by reducing their reactive current supply.
Switching to (kVA) maximum demand will involve steps to be taken to ensure that the reactive component is kept to a minimum with maximum power factor. ESKOM has structured various tariff rates and charges with unique features that would accommodate the consumers in their demand side management and load cost requirements, which, when applied, will result in an efficient and cost effective load profile. These tariffs are designed to guide consumers automatically into an efficient way of using electrical power, as it is designed to recover both the capital investment and the operating cost within two to three years after installation of power factor correction equipment.
ESKOM's concept of Time-of-use (TOU) periods for peak, standard and off-peak times during week, Saturday and Sunday periods is discussed as load management.
Interruptible loads can be scheduled or shed to suit lower tariff rates and to avoid maximum demand charge. The concept of load management will change the operation pattern of the consumer's electricity demand whereby the consumer will have immediate technical and financial benefits.
In the last chapter of this dissertation, a hypothetical case study addresses and concludes on some of the technical and cost implications of electrical power factor correction and load management as a successful and profitable solution to optimize electrical power supply to the consumer. By implementing the above, ESKOM ensures that the consumer utilizes the electrical power supply to its optimum level at the lowest cost per kilowatt- hour (kW.h) generated. OPSOMMING
ESKOM is tans die vyfde grootste verskaffer in die wereld wat elektriese drywing genereer en versprei na kliente teen die laagste eenheidsprys per kilowatt-uur (kW-uur).
ESKOM is die grootste verskaffer van elektriese energie in Suid-Afrika en ontwikkel en versprei elektriesie energie op aanvraag na ongeveer 3000 kliente wat ± 92% van die
Suid-Afrikaanse mark verteenwoordig. Vir die doel van hierdie studie word ESKOM gekies as die verskaffer van elektriese energie.
ESKOM se doelwit is om middele en stelsels te voorsien wat tevredenheid sal besorg aan kliente sodat hulle die beste en mees effektiewe koste-voordeel van elektriese verbruik kan geniet. Om te verseker dat die klient 'n deelname in hierdie doelwitte het, het ESKOM 'n besluit gedurende 1994 geneem om die voorsieningstariewe van aktiewe drywing (kW) na skynbare drywing (kVA) te verander vir 'n aantal redes:
Om 'n struktuur daar te stel waarby die voorsiener en die klient die bestuur en
benutting van elektriese drywingstoevoer optimaal kan beheer.
Aanvraag en ladingsbeheer kan benut word deur arbeids-faktor regstelling en die
implementering van lading bestuurstelsels.
Om sekere koste-implikasies van elektriese en arbeids-faktor regstelling en
ladingsbestuur te identifi seer.
Kliente met (kW) maksimum aanvraag tarief-opsies het min of geen finansiele voordeel om sodoende die lae arbeidsfaktor (PF) te verbeter deur die reaktiewe stroom lewering te verminder. Die oorskakeling na kVA maksimum aanvraag sal tot gevolg he dat versekerde stappe geneem sal word om die reaktiewe komponente tot a minimum te beperk met 'n maksimum arbeidsfaktor.
ESKOM het verskeie strukture met tariewe en unieke kenmerke wat die klient sal skik in sy terrein van bestuurs-aanvraag en ladingskoste vereistes. Wanneer dit wel geimplimenteer word, het dit doeltreffende en koste-effektiewe ladingsprofiele. Hierdie tariewe is ontwerp om die klient outomaties na 'n meer doeltreffende metode van die gebruik van elektriese ladingsbestuur te lei, omdat dit ontwerp is vir beide kapitaal belegging en bedryfskoste herwinning binne twee tot drie jaar na die installering van arbeidsfaktor regstellingstoerusting.
ESKOM se konsep vir ladingsbestuur word bespreek en dit behels die gebruik van periodes van tye van drywingsverbruik (TOU) waaronder spits-, standaard- en laagtyd verduidelik word, betreffende weekstye, Saterdae en Sondagperiodes. Onderbroke ladings kan geskeduleer of gekanselleer word sodat die lae verbruikstariewe in aanmerking kan kom en maksimum aanvraag kostes vermy kan word. Hierdie konsep van ladingsbestuur sal die bedryfspatroon van die klient se elektriese aanvraag verander en daardeur sal die klient onmiddellike tegniese en finansiele voordeel geniet.
`n Hipotetiese gevallestudie word aangespreek wat van die tegniese en koste implikasies van arbeidsfaktor-regstelling en ladingsbestuur as 'n suksesvolle en winsgewende oplossing uitwys en sodoende die kragvoorsiening na die klient optimaliseer. Deur die bogenoemde to implimenteer, verseker ESKOM dat die klient elektriese kragvoorsiening optimaal sal aanwend teen die laagste koste per kilowatt-uur (kW-uur). TABLE OF CONTENTS
ACKNOWLEDGEMENTS
SUMMARY
CHAPTER 1 ELECTRICITY SUPPLY IN SOUTH AFRICA PAGE
Introduction 1
1.1 Historical background 1
1.2 Presently 2
1.3 Problem statement 3
1.4 The structure of the study 5
1.5 Objectives of power factor correction 6
1.6 Conclusion 9
CHAPTER 2 POWER FACTOR CORRECTION
2.1 Introduction 10
2.2 What is power factor correction (PFC) 11
2.2.1 Constant kW correction 12
2.3 The importance of power factor correction 14
2.4 Some technical disadvantages of a poor power factor 16
2.5 Some methods of obtaining a good power factor 17
2.6 The need for power factor correction 19
2.6.1 Technical reasons 20
2.6.2 Economic reasons 20
TOC 1 2.7 The impact of poor power factor on the utility 21
2.8 Factors affecting power factor levels 22
2.9 Power factor measurement 22
2.10 Capacitor Rating 25
2.11 Conclusion 25
CHAPTER 3 TARIFF STRUCTURES OF THE UTILITY
3.1 Introduction 27
3.2 The approach 28
3.3 Tariffs 29
3.4 Tariff options 30
3.5 Time-of-use (TOU) tariffs 31
3.6 Tariffs on power factor 32
3.7 Cost implications for time-of-use 34
3.8 Implication of tariffs 34
3.9 Two-part tariffs 37
3.9.1. Capital investment costs 37
3.9.2. Running costs 38
3.10 Conclusion 38
CHAPTER 4 LOAD MANAGEMENT 4.1 Introduction 40 4.2 Load management planning 41
TOC 2
4.2.1. Planning 41
4.3 Load Measurement categories 44
4.3.1 Load factor 44
4.3.2 Interruptible loads 45
4.3.2.1 Interruptible electric service 46
4.3.2.2 Appliance control 46
4.3.2.3 Demand limitations 46
4.3.3 Strategic conservation 46
4.3.4 Energy management 47
4.4 Time-of-use load scheduling 48
4.4.1 ESKOM's Megaflex / Miniflex / Ruraflex 49
4.4.2 ESKOM's night-save 51
4.5 Time-of-use maximum demand 52
4.6 The need for load shedding 53
4.6.1 Primary load shedding 54
4.6.2 Frequency load shedding 54
4.6.3 Manual load shedding 55
4.6.4 Maximum peak power demand shedding 55
4.7 Demand control 55
4.8 Conclusion 57
CHAPTER 5 CASE STUDY
5.1 Introduction 59
TOC 3 5.2 Problem statement 60
5.3 Case study 60
5.4 Approach to the case study 61
5.5 Power supply and improvements 61
5.6 Summary of the case study 63
5.7 Conclusion 64
CHAPTER 6 CONCLUSIONS AND RECOMMENDATIONS 6.1 Final conclusion 66 6.2 Recommendations 67
ANNEXURE TO THE CASE STUDY
7 Power supply and improvements 69
7.1 Power load distribution 69
8 ESKOM's tariffs and charges for 2001 70
8.1 Annual energy cost before power factor correction 71
8.2 Annual cost saving after power factor correction 71
8.3 Annual energy cost saving after power factor correction 72
8.4 Capital cost to improve power factor correction to 0.96 72
8.5 Pay-back time on capital investment 72
9 Load management (LM) 73
TOC 4 9.1 Annual energy cost before load management 73
9.2 Annual cost saving after power factor correction
and load management 73
9.3 Total annual cost saving after load management
and power factor correction 73
10 Compound amount of capital 74
10.1 Equal payment series with compound amount after
power factor correction 74
10.2 Equal payment series with compound amount after
load management 75
10.3 Grand total compound amount on capital saving 75
LIST OF FIGURES
LIST OF TABLES
BIBLIOGRAPHY
TOC 5 LIST OF FIGURES AND TABLES
FIG. NO. DESCRIPTION CHAPTER PAGE
2.1 Power vector for constant kW 2 12
2.2 Vector of active, apparent and reactive currents 2 13
2.3 Vector angle between kW and kVA with lagging
power factor 2 14
2.4 Wave-forms of leading power factor 2 23
2.5 Daily demand versus power factor 2 23
3.1 Comparison of Standard-rate 3 32
3.2 Vector for free charge loads 3 33
3.3 Increase of capacitance required as unity
power factor is reached 3 36
4.1 Average cost as a function of load factor 4 45
4.2 Demand periods for weekdays 4 51
4.3 Demand periods for night-save 4 51
4.4 Typical demand profile without demand control 4 56
4.5 Typical demand profile with demand control 4 57
7.1 Power load distribution Annexure 69 8 ESKOM's tariffs and charges for 2001 Annexure 70
8.1 Factory plant working (TOU) schedules Annexure 70
8.2 Proposed change of (TOU) schedules for plant Annexure 70
TABLE NO. DESCRIPTION CHAPTER PAGE
4.1 Average time-of-use cost 4 49
8 ESKOM tariffs and charges for Megaflex Annexure 70 CHAPTER 1
PROBLEM STATEMENT AND OBJECTIVES
INTRODUCTION
1.1 HISTORICAL BACKGROUND
On 5 June 1873, the British Minister of U.K. decided to change the farm Vooruitzicht in South Africa to Kimberley, the place that some time ago delivered the greatest diamond of all time, the Star of Africa. Kimberley had a population of 20 000 and developed in a short period to the full status of a city. Steam trolley-bus services existed in 1881, which were replaced with electrical trolley-busses in 1902.
South Africa has always been well advanced in the use of electricity. Kimberley had electric street lighting in 1882 before the City of London and only three years after
Edison started supplying electricity from the Pearl Street Power Station in New York.
The first electric reticulation system was commissioned in Kimberley in 1890, and
Johannesburg Municipality began to supply electricity in 1891 [26]. Electricity supplies were provided in Pretoria, Cape Town, Durban, East London, Port Elizabeth,
Bloemfontein and Pietermaritzburg by 1906 [43, 44].
"The need was recognized for a national electricity authority early in the 1920s and in terms of the Electricity Act of 1922 the Electricity Supply Commission (ESCOM, later changed to ESKOM) was formed by a notice in the Government Gazette of 6
March 1923" [26, 40].
Page 1 A cheap and abundant supply of electricity was provided by ESKOM throughout
South Africa [42, 5]. In less than thirty (30) years, ESKOM owned and operated six
electricity undertakings. Each undertaking generated and supplied power to the major
load centres throughout the country via a transmission network system. For ESKOM
to meet the rapid increase in power demand, they had to build seven new power
stations between 1950 — 1961 [41, 43].
"South Africa's first nuclear station using sets of about 1000 MW rating was
commissioned near Cape Town in 1982" [26]. Up to 1970, virtually all generation
was done in coal-fired stations. The world's largest dry-cooling coal power station,
Matimba, was finally commissioned in 1995 near Ellisras in South Africa. ESKOM
is rated as the world's fifth largest utility in the supply of electrical power and the
lowest cost producers of electricity in the world. (ESKOM's Annual Report 1999)
[41].
1.2 PRESENTLY
South Africa has, until recently, been in a position where the utility supplying
electrical energy to the different consumer sectors, had adequate capacity to supply its
consumers. This situation is rapidly changing due to various factors.
ESKOM has introduced a pilot project aimed at the development and introduction of a
real-time pricing tariff to its consumers. There are a number of factors that affect the
electricity cost to consumers, each of which can be managed by the consumer in order
to reduce a consumer's electricity bill.
Page 2 1.3 PROBLEM STATEMENT
For many years, the gold mines and large power users enjoyed a special dispensation with respect to electricity in the previous ESKOM-era structure via kilowatt-hour
(kW.h) tariff rate [25, 40].
The mines and other large consumers enjoyed kW maximum demand tariff as opposed to the kVA maximum demand tariff for the rest of the country. A one-hour block demand integrating period was allowed to calculate the kW maximum demand in contrast to the half-hour block demand integrating period for the kVA maximum demand tariff. ESKOM specified that consumers use the kW maximum demand tariff to maintain an average power factor for each one-hour integrating period to be greater than 0,85 (i.e. the kvar.h units consumed to be less than 62% of the kilowatt-hour units consumed, for each integrating period). This was seldom enforced on the consumers with no effect of any financial penalty [25, 40].
Many consumers on the kW maximum demand tariff option had power factors below the contractual limits as there was little or no financial incentive due to the special dispensation for improvement. Consumers on the half-hour kVA demand tariff paid significantly more than consumers on the one-hour kW demand tariff for electricity.
However, notification was given to all kW demand tariff users that their privileged position would be terminated. Financial opportunities were made available to change to a half-hour kVA demand tariff and the simultaneous installation of power factor correction equipment [25].
Page 3 It was announced in an advertisement in the Business Day (11 January 1998) that
"ESKOM proposed an amendment to standard prices and the promulgation of a charge for excess demand on Standard-rate and Night-save tariffs" [25].
With effect from 1 April 1998, ESKOM introduced charges for excess demand on kW demand consumers whose power factor was below 0,85 , based on the kVA and kW demand readings in the one-hour block interval during which the kW maximum demand was registered, as follows:
"Excess demand = (kVA demand x 0,85) — (kW demand)". (1.1)
It was then decided that active power (kW) demand consumers with a power factor at maximum demand of less than 0,85, would be financially penalised [25].
For the following four years, the Standard-rate and Night-save active power (kW) demand charges were progressively increased by 1,42% per annum above the average annual increase applicable to the apparent power (kVA) demand tariff. The implementation of the above actions turned out that the apparent power (kVA) demand tariff was more attractive to the consumers. This resulted that after a few years, kW demand consumers with a power factor greater than 0,85, benefit more by changing to kVA demand tariff, with effectively no cost penalty, and with the opportunity of very significant cost savings in their electricity bill by installing power factor correction equipment" [25].
Page 4 Distribution power economy, a company in load management, offered a comprehensive tariff analysis and tariff impact study service. This included design, engineering, supply, installation and management of effective power factor correction and demand side management projects. In most cases, these projects can be fully financed by the savings in the electricity bill effected by the installation of the power factor correction equipment. This capital outlay on the power factor equipment was usually paid back within one to two years, which was indeed a good investment opportunity [25].
1.4 THE STRUCTURE OF THE STUDY
In the light of the above mentioned historical background and problem statement, this study will cover some cost implications of power factor correction and load management that are considered to be necessary to improve the utilisation of electrical power supply to the consumer. The following factors will be covered in Chapter 2, i.e. what is power factor correction, the relationship between active power (kW), apparent power (kVA) and reactive power (kvar), the importance of power factor correction, technical and economical reasons affecting the power factor (PF) levels.
The tariff structure in Chapter 3 will address the impact of the various tariff options for the consumer that are applicable to power factor conditions, time-of-use tariffs and two-part tariffs. Load management is the second factor in this study
Chapter 4 will cover load management planning, categories of load management, time-of-use (TOU), load scheduling, maximum demand control are all factors when implemented and managed correctly. This should reduce the load demand to the
Page 5 consumer and ultimately turn into financial savings. A hypothetical case study in
Chapter 5 addresses and concludes the above mentioned methods and implications with cost analysis, conclusions and final recommendations.
1.5 OBJECTIVES OF POWER FACTOR CORRECTION
Financial benefits in the installation of certain specialised equipment can be achieved in an industrial or mining installation in the following three areas:
"Savings on electrical tariff charges.
Enabling additional installed capacity without additional cost.
Increased operational efficiency of electrical equipment, including reduction of
maintenance costs" [24].
Any sizable electrical system is usually charged with a tow-part tariff by nature:
"A unit charge based on the number of units consumed per month.
A charge based on the highest half hour (or one hour) maximum demand over a
monthly period" [24].
Currently, there are two methods in operation to measure maximum demand:
kVA (kilo-Volt Amp), and
kW (kilowatt).
ESKOM prefers to measure maximum demand in apparent power (kVA), and it is now mandatory for all new installations to be installed and charged on this basis. The active power (kW) method is in the process of being phased out, and certain financial incentives for existing installations to switch from active power (kW) to apparent
Page 6 power (kVA) basis have been offered by ESKOM. The apparent power (kVA) of a load comprises two components:
The kW or active component (which can be converted directly into useful work),
and
The kvar or reactive component (which cannot be converted directly into useful
work) [24, 25].
The reactive component of electrical load indicates the measure of the power factor of an installation. The utilisation of items of equipment that has inductance and requires magnetic fields to operate (i.e. electric motors and transformers) tends to have higher reactive components. To improve the efficiency of the plant, system or electrical distribution network, the reactive component is to be kept to a minimum throughout the system.
The power factor in a system ranges theoretically from zero to one. When a plant or system has a power factor of one, the operation has maximum efficiency. As the system current drops, it provides a clear evidence that the system's efficiency has improved when plant losses decrease and output increases, i.e. less motor burn-outs and the starting of motors improves. ESKOM' s new charge for maximum demand on installations (apparent power) is directly related to the power factor, as is shown in the following equation: [24]
Power factor = active power (kW) (1.2) apparent power (kVA)
S2 p2 ± Q2
Where S = apparent power P = active power Q = reactive power
Page 7 When the reactive component decreases, the apparent power component will decrease, the power factor will increase and the maximum demand charge will decrease, which will result in a tangible cost saving.
However, the maximum demand charge is not affected by the power factor for those installations still operating on active power (kW) maximum demand basis.
Depending on the nature of the electricity usage by the operation, a strategy could be devised to reduce the maximum demand charge. Switching to apparent power (kVA) maximum demand will involve steps to be taken to ensure the measurement basis of the strategy is and that the reactive component is kept at a minimum, with maximum power factor [8, 24, 25, 40].
Various methods are available to ensure that a high power factor of 0,98 to 0,99 is maintained during plant operation. This will require the correct design and installation of specialised equipment for the purposes of power factor correction. The operational efficiencies of the installation will also enhance the importance and attractiveness of such power factor equipment [24].
Page 8 1.6 CONCLUSION
Power factor correction with its attendant cost savings both in the short and long term are an issue, which should be investigated thoroughly by all managers who are serious about improving their financial performance.
The system to perform a complete service analysis in the area of power factor correction is available from preliminary investigation through to design, supply and implementation. To reveal the possible cost savings and pay-back period, preliminary sophisticated measuring and reporting facilities could be used and followed by a more tailored design, manufacture, installation and maintenance plan.
Page 9 CHAPTER 2
POWER FACTOR CORRECTION
2.1 INTRODUCTION
ESKOM changed the power supply tariffs from active power (kW) to apparent power
(kVA) in 1994 and introduced a maximum demand tariff that aims at forcing the
consumer to improve the power factor to 0.96.
Eric Granger [5] states that power factor correction is a method of using alternating
current in the most economic fashion. It can reduce current, reduce losses and, as a
possible consequence, reduce electricity charges. It is a method ensuring that the
voltage and current remain substantially in phase with each other, producing the
optimum power [5]. This chapter will cover the following aspects of power factor
correction:
What is power factor correction [4]?
Constant active power (kW) correction.
The importance of power factor correction [5].
Some technical disadvantages of a poor power factor [3].
Some methods of obtaining a good power factor [3].
The need for power factor correction [1].
The impact of poor power factor on the utility [1, 5].
Factors affecting power factor levels.
Page 10 • Power factor measurements.
2.2 WHAT IS POWER FACTOR CORRECTION?
All electrical operational plants comprise two kinds of current, namely active current
and the reactive component. These components effect the power factor Cos 4). The
definition of power factor as stated by Theodore Wildi is "the power factor of an
alternating current circuit is the ratio of the active power P to the apparent power S,
given by the equation;
Power factor = P / S = Cos 4) (2.1)
Where P = active power (W)
S = apparent power (VA)" [6]
The active current (or working) is the current that the equipment requires for useful work, while the reactive current is the wattless current that is produced by different types of loads. W.G. Hutcheon defines that the power factor may be expressed as the ratio of working current in a circuit to the total current in that circuit, and its value is exactly equal to the ratio of active power (kW) or the working power to the total apparent power (kVA) [4].
Power factor = Iw = active power (kW) = Cos • (2.2) It apparent power (kVA)
Where Iw = working current = active current
It = total current = apparent current
Page 11 2.2.1 Constant active power (kW) correction
If static capacitors are used to correct a power factor from Cos 4)1 to Cos 4)2, the apparent power (kVA) diagram is as in Figure 2.1.
P kW
Q kvar
Figure 2.1 Power vector diagram for constant active power (kW POP Cos 4 = active power (kW) apparent power (kVA)
OA = kVA of load before correction. OD = kW of load. DA = kvar lagging before correction (This indicates an inductive load). OB = kVA of load after correction. DB = kvar lagging after correction. AB = the required leading kvar.
= DA — DB = OD (Tan (I) 1 — Tan 4) 2)-
[4, 8, 10].
Page 12 The total current required by a plant comprises two kinds of currents, namely working
current (in phase with the voltage) and reactive current (90° lagging the voltage). The former is the current that is converted by the equipment into useful work (active
current), and the latter is the current that is required to produce the magnetic flux
necessary for the operation of induction equipment, and is named the magnetising
current (reactive current) or wattless current.
The working current flows in phase with the voltage and the inductive reactive current lags the voltage by exactly 90°. The total current and the reactive currents are vectorially represented in Figure 2.2 and Figure 2.3.
Active current l w Voltage
Reactive current I t
Apparent current I t
Figure 2.2 Vectors of active, apparent and reactive currents 1101
The vector diagram, as indicated in Figure 2.3 represents the working current (Iw) and the reactive current Ir. The total current is defined as follows:
ir 2 It = (2.3)
The power components in terms of voltage and current components are:
Apparent power (kVA) = V(kV) x It (total current in It)
Active power (kW) = V(kV) x Iw (working current in Iw)
Reactive power (kvar) = V(kV) x Ir (reactive current in Ir)
Page 13 NOTE: Voltage and current values are root mean square (RMS) values. From the vector diagram, the power factor may also be expressed as the ratio of working current in a circuit to the total current in the circuit [5, 45, 49].
Figure 2.3 Vector angle between active power (kW) and apparent power (kVA) with lagging power Factor 110]
2.3 THE IMPORTANCE OF POWER FACTOR CORRECTION
Without adequate power factor correction, any industrial load can draw as much as twice the current that is required. This means that a large element of apparent current is drawn from the supply, causing losses in the distribution cables and equipment, etc.
These losses have a great impact on the sizes of cables and system equipment that will influence the capital lay-out of the plant [5, 20]. By improving the power factor, the reactive current component will be reduced, which should have a cost saving for the consumer [46].
In 1998, ESKOM undertook to lead the way in energy conservation by replacing the biggest commercial office lighting development in South Africa at Megawatt Park.
ESKOM modernised, standardised and upgraded the efficiency of the office lighting, resulting in improving the system's power factor, thereby maximizing the economic benefit of the power usage [2].
Page 14 The purpose was to reduce the reactive power costs of Megawatt Park enough to compensate for the additional capital outlay [2. 4, 5]. "The improvement had the following advantages:
Reduce energy consumption figures kilowatt-hour (kW.h).
Lower contribution of the lighting installation to the total building maximum
demand apparent power (kVA).
Correction of the lighting's power factor to 0.96.
Flicker free fluorescent lighting.
Lighting levels continuously within the range specified.
Longer lamp life.
Lower lamp lumen depreciation over lamp life time.
Reduced maintenance cost.
Better colour rendition.
Reduced noise levels associated with the lighting installation.
Reduced heat load to building air conditioning.
Improved productivity of building users" [2].
The cost to upgrade the lighting at Megawatt Park was in the region of R3.7 million.
The energy cost saving per year was approximately R820 000, with additional maintenance savings of R40 000. The power kilowatt-hour (kW.h) annual saving resulted in approximately R5,5 million capital, which was paid back over four years
[I, 2, 52]. From this example, it is clear that power factor correction offers an obvious and immediate cost benefit to consumers who are charged on apparent power
(kVA) demand with improved power factor system [2, 5].
Page 15 In South Africa, electricity power tariff charges vary across the country due to area and point of supply, i.e. domestic loads will be less costly to supply than an industrial township or agricultural land. Industrial sites are measured and charged with a maximum tariff charge because the amount of inductive equipment working from the power supply is more exposed to power factor correction system due to the apparent current factor (kVA).
Most of the fluorescent light fittings are equipped with power factor correction capacitors, whereas induction motors and transformers, which are uncorrected, contribute towards poor power factor values [4, 5, 52]. Fluorescent lights in use represent a steady load, because they are fitted with capacitors in the factory and often this installation tends to be forgotten.
2.4 SOME TECHNICAL DISADVANTAGES OF POOR POWER FACTOR
The most obvious drawback for a load of low power factor is that the current necessary is greater than for the ideal case of unity power factor.
A low power factor will result in low voltage regulation on a transmission line and
expensive appliances, i.e. step-up transformers might be needed to ensure that the
end-voltage regulation meets the sending end voltage. As induction motor torque
is proportional to the square of the applied voltage, a large sudden fall in the
voltage could cause the motor to come to a halt [3, 49].
The amount of active power (kW) is not affected by the power factor, but it will
be less than the apparent power (kVA) capacity of the central station that is
affected by the value of the power factor. Although power generators may be
Page 16 fully loaded from an output point of view, the load may still be in demand for
more current as the generators will not be delivering their full load of true power
[3, 49].
2.5 SOME METHODS OF OBTAINING A GOOD POWER FACTOR
"The obvious method is to use, wherever possible, apparatus which has good power factor" [3]. The installation of a capacitor has the effect of decreasing the current taken from the supply but does not decrease the excitation current actively circulating round the capacitor-motor circuit. The current flowing through the capacitor will lead the voltage by 90°. The best position for a capacitor is, theoretically, as close as possible to the motor, directly across the motor terminals. This will allow the use of a smaller size of feeder owing to the reduced current taken from the supply.
The capacitor should be individually connected to a motor and controlled by the same switch as the motor so that it is brought into service when required. Group and block connection of capacitors requires some method of control as capacitance must be taken out of service when not required. Automatic control is the best type of control.
Most of the reactive power can be produced by capacitors installed in parallel with the motor, either as the motor terminals or as starter terminals. When dimensioning the cable to the capacitor, fuses or backup circuit breakers protect the supply cable and the motor. Therefore, the capacitor cable must be rated such that it is protected by a short-circuit device. When setting any over-current relays, the effect of the capacitor is to reduce the current and this must be taken into account.
Page 17 It is sometimes possible to correct power factor by means of a common capacitor, such as discharge lamps controlled by a three-phase contactor. Therefore, it does not warrant the installation of many small capacitors due to the higher cost per reactive power (kvar), and the cost of installation and possible cable with glands. A good option would then be that of a centralised power factor correction system, connected to the main distribution board. The reactive power regulator controls the switching of the capacitor steps according to the varying reactive power requirements in an automatic capacitor bank. Inductive and capacitive operating limits for the regulator are set and the amount of reactive power in the system is maintained within these limits, which would diminish problems of over-compensation [48]. Care must be taken in rating cables and feeder circuit breakers connecting power factor correction equipment to the distribution board because capacitors draw a constant current at constant voltage with no diversity factor or load variation, as is the case with other loads, such as motors driving compressors. Capacitor reactive power (kvar) is proportional to the square of the applied voltage and changes in voltage significantly increase the current drawn by the capacitors.
Three-phase induction motors are normally supplied uncorrected, which will contribute towards poor power factor figures. Items representing a varying working load, e.g. induction motors, may need a degree of power factor correction. This will vary with their work load, and automatic switching of capacitors is available for this purpose in order to serve complete factories or equipment complexes.
Correcting the power factor of individual motors is another factor to be considered.
Large motors are generally fitted with their own phase advancer. Small motors can be looked after by installing batteries of static capacitors across the supply terminals.
Page 18 The efficiency of the modern capacitors is very high as the dielectric losses are less than 0,5% of the apparent power (kVA) capacity of the capacitor. Very little error is therefore made by assuming that they take a current that leads the applied voltage by exactly 90° [3].
2.6 THE NEED FOR POWER FACTOR CORRECTION
"Apart from the technical benefits to the utility (i.e. to mitigate the problems enumerated above), there are also significant advantages for consumers to improve their power factors" [1].
Power factor correction capacitor generally pay for themselves within two or three
years, after which any further savings accumulated, will be to the benefit of the
client [1, 5, 24]. In the case study in Chapter 5, the power factor was improved
from 0.7 to 0.96, and the capital invested was paid back within 2.88 years.
Energy losses in the consumer's own networks are very much a hidden factor, and
lost energy at full tariff purchased, could also be a great saving investment [4, 5].
Both the consumer and the utility network capacity are affected if the power factor
is low or improved [1, 49, 52]. A low plant operating power factor may result in
overloaded distribution supply and transformers, and increased copper losses in
equipment, which result in a reduced voltage level. Improvement in the power
factor can reduce the power losses, raise the voltage, reduce system losses and
reduce power cost.
Poor power factor has an increasing maintenance burden on any power plant and
switch-gear, but with an improved power factor system it should require less
maintenance and be less costly to operate [1].
Page 19 2.6.1 Technical Reasons
If the power factor was improved to 0,96, the plant would have used much less current and would therefore have extra active (kW) power in reserve. The voltage drop is proportional to the current and will therefore decrease with the current. It therefore follows that the closer the power factor correction equipment is situated to the source of low power factor (load), the greater will be the benefits and results accrued from the correction equipment.
It is clear from the above that the apparent power reduces as the power factor improves [6, 8]. The result will be that the apparent current (kVA) after the correction is less than before the correction, which means that the live currents have also reduced in the same ratio as the total power. Therefore, the plant connected to the correction equipment will not be as heavily loaded as before the correction.
2.6.2 Economic Reasons
From a technical point of view, the kilowatt-hour (kW.h) savings might be small due to the losses in the cables, but without power factor improvement the cable might have to be much larger in cross sectional area in order to carry the apparent power.
This includes other plant equipment, which will result in an additional capital lay-out
[8, 59].
The main reason for power factor correction is the saving of electrical charges. The distribution and transmission network of the utilities has to accommodate various supply and load conditions on their systems, as consumers individually have different demands in loading, peak currents, maximum demand and power factor levels [8, 14,
Page 20 21]. Therefore, the utilities apply a two- or even a three-part tariff. The two-part tariff consists of energy kilowatt-hour (kW.h) charge that indicates the total usage of energy supplied to the consumer during the month. "In certain cases where the utility wishes to reduce the peak during a certain period of the day, it introduces a second demand charge for the period of the day. This charge compensates users who reduce their own demand during the utility's peak demand period" [8, 15].
Consumers that are charged on apparent power (kVA) demand tariff can only benefit with an improved power factor system. Figure 2.1 indicates that active power (kW) demand is not affected by power factor correction. The tariffs across the country vary largely due to distance, demand and consumer needs [8, 14].
2.7 THE IMPACT OF POOR POWER FACTOR ON THE UTILITY
Poor power factor impacts negatively on the costs of the system in three main areas:
Poor power factor will cause the network capacity not to be fully utilized, i.e. 0,5
power factor will only supply 50% active power. This will result in a premature
(unnecessary) upgrade of the system instead of only improving the power factor
[1, 5, 52].
Excessive energy losses are due to high current and low voltage from motors and
transformers in their magnetic fields [6, 49].
The cost of compensating equipment such as static VAR compensators (SVCs) as
well as the cost of generating reactive power, remains an expensive investment by
running generators sets in synchronous condenser mode [1]. Static compensation
delivers or draws reactive power in order to stabilize the voltage [1, 6].
Page 21 2.8 FACTORS AFFECTING POWER FACTOR LEVELS
Power factor has different levels due to the various loads on plant systems that vary with load supply. The maximum demand has an important influence on the power factor rating. The consumer's previous twelve-months electricity account coupled with a good overall knowledge of plant operation and load measurement would be a useful evaluation for the power factor correction specification [8, 20, 40].
2.9 POWER FACTOR MEASUREMENT
Load measurement exposes extensive savings as load management and reactive power compensation go hand in hand. Load management should start with measurement and planning. The following two options are raised in this regard [14, 39, 40]:
Power factor usually varies with load [14].
Measurement of the power factor is not only Cos (I) as harmonics can influence
current wave-forms from zero crossing as shown in Figure 2.4, and a more
rigorous way of measuring power factor must be utilised. Spot measurements
could be misleading as the power factor normally varies with the load [33].
Page 22 276
220 -
165
110 -
055 E ct 000
-055
-110 -
-165
-220 -
-276 I 11 f 1 1 1 1 1 I 1 1 1 0.0 2.5 5.0 7.4 9.9 12.4 14.9 17.4 19.8 Time (ms)
Figure 2.4 Wave -forms of lagging power factor [39J
Before power factor correction or load management can be implemented, it would be sensible to carry out a power survey. The survey could be done with a commercial power analysis.
KVA Demand and Power Factor PF 200 1.00
Powe 160 0.80
120 0.60 ea 0 0 I
080 0.40
0.20
Daily demon
000 0.00 1 06/19 06:00 06/19 22:00:00 06/20 14:00:00 06/21 06:00:00 Test Time Figure 2.5 Daily demands versus power factor [391
Page 23 Figure 2.5 is a graphic representation of the correlation between the power factor and daily demand which indicates that the power factor varies with the load. Controlling the demand must be undertaken with a detailed knowledge of the nature of the load, the consumption pattern, the power factor variation and an understanding of the likely impact of changes in the plant or environment [14, 39].
"Consider the following example: 80% of the total load consists of four large motors.
It would possibly be more economical to install capacitors directly onto the motor terminals, as this would eliminate the need for costly control switch-gear for the capacitors" [8]. The following points are to be noted:
Do not fit the motor with a capacitor that is too large, as this could cause the
motor to become self-excited when the supply is temporarily disconnected.
The motor could generate an over-voltage, which might cause connected lamps to
burn out and the failure of the motor insulation due to over-voltages.
As the motor current decreases, one will have to reset the motor protection.
If the load is constant — the load factor should almost be at unity.
A fixed capacitance could be fitted to the load into the busbars of the distribution
switchboard [8].
However, if the load drops, the power factor of the system will become leading and the system could become unstable [6, 8, 55]. It is essential to monitor the amount of kilovars on the distribution system, and to switch capacitors in and out depending on the load demand. These could be managed by using power factor relays. These
relays sense the power factor of the distribution system and switch the capacitors of
Page 24 the system on demand. The settings on the power factor relay determine the time
delay between the switching of various steps.
2.10 CAPACITOR RATING
There are many factors that must be taken into consideration when designing a power
factor correction system [4, 8]. Increases in system voltage, the presence of
harmonics and the actual tolerance of the capacitors will overload the capacitor rating.
"One manufacturer derates his capacitor's so that it can take a 20% over-voltage, a
50% over-current and a 45% increase in power. The international electro-technical
standard specification no.70 calls for a 10% over-voltage and a 30% over-current
derating. These ratings are determined at an ambient temperature of 40°C. The
recommended derating in power is 5% at 45°C, 15% at 50°C and 30% at 55°C" [8].
2.11 CONCLUSION
This chapter indicates the steps to be taken to improve the power factor and to what level of expense the consumer is exposed with a low power factor. As indicated in
Figure 2.1, the power factor is the ratio between the 'active power P' and the
`apparent power S', which is expressed as a percentage of the cosine angle between the active and apparent powers. It also indicates that the active power cannot exceed the apparent power. However, as the angle between `13' and 'S' increases, so does the reactive power 'Q', which indicates that the power factor is lagging as the load requires kilovars (kvar) from the power source.
ESKOM has proven at Megawatt-Park office centre that by implementing power factor correction, both reactive power and the apparent cost were reduced, and the
Page 25 life-cycle of the equipment was also improved due to the wattless current component.
There are many methods and apparatus that can be applied to power factor correction.
However, only capacitors will be covered in this dissertation. The need to improve power factor components has technical and financial advantages that outrate any form of low power factor components. The power factor of a system is determined mainly by the nature of the load itself, and a low power factor of 0.7 can be improved to 0.96 by installing capacitors.
From the utility point of view, it reduces the real system load capacity due to the excessive energy losses and high currents that are far more valued than the cost involvement to implement power factor correction system to any plant operation.
Before implementing any power factor correction system, it is advisable to perform a detailed plant analysis on both the technical and financial issues as referred to in order to assess the value and impact of the required power factor correction system.
Page 26 CHAPTER 3
TARIFF STRUCTURES OF THE UTILITY
3.1 INTRODUCTION
"Electricity tariffs are designed to recover both the costs associated with the actual generation of electrical energy and the considerable capital investment associated with the infrastructure to transmit and distribute this energy. The costs associated with generation are recovered by charging for the actual energy consumed, while the cost of transmitting the electrical energy is recovered by a maximum demand charge"[20,
21, 22].
The aim of an electric utility is to ensure that the energy generated and the distribution and transmission network are controlled, optimized and maintained to supply electricity on demand. Good management could be achieved if marginal cost pricing were used as an effective tool on the demand side [14, 18]. Fabrycky stated that "The term marginal cost pricing refers- specifically to an increase of output whose cost is barely covered by the monetary return derived from it" [62]. From the ESKOM 1999
Annual Report, it is clear that the above definition suits its purpose as it generates electricity power at a non-profit return, and as already stated, the lowest in the world.
It is thus imperative that ESKOM also designs tariffs and charges to such a degree that they will fit the above definition with the scope that they will cover all the costs associated with the supply and demand of electrical power. "ESKOM announced that
Page 27 by selling more kilowatt-hour (kW.h) during off-peak periods, the total peak demand
could be reduced, which enables generating equipment to operate more effectively
over longer periods of time. This would mean that there will be more electric power
available without increasing of capital cost" [14].
3.2 THE APPROACH
"The constant adaptation between electricity supply and demand can be achieved in
two ways: on the supply side, through the construction of additional facilities and on
the demand side, by implementing tariffs, load management schemes and a
commercial policy" [18]. When the demand changes, the supply system will also
change as both the consumer and utility have installed capacity and have operating
conditions of the system. These conditions have to be taken into account.
In order to reach an overall optimum for the community as a whole, ESKOM decided
to control the total load demand system. Implementation of appropriated tariffs and
load management schemes to compare costs resulted in benefits for both the utility
and consumer to be reflected by marginal generation and distribution costs.
ESKOM, as the largest supplier of electricity, has certain pricing rules to follow: meeting the demand, minimising its production costs and selling at marginal costs.
The consumer's electricity consumption pattern has a cost factor in the supply system which has been affected by the consumption via the tariff charge [16, 18, 40].
B.Lescoeur stated: "By selecting the alternative to minimise the cost, the consumer will choose the least cost alternative for the whole community" [18].
Page 28 All the differences in cost cannot be reflected, nor can all the costs verify the various kinds of supply. It is therefore necessary to equalise and limit the tariffs and metering as well as the installation costs to avoid excessive complexity of the tariffs. By selecting the correct tariff, consumers are often able to reduce their electricity bills without any further intervention. By selecting the right tariff and exploiting the tariff characteristics, consumers can make a positive impact on this important input cost.
The utility must evaluate the larger energy user requirements and investigate possible electrical solutions to accommodate their needs of loads [15, 18]. Electrical solutions with competitive large development potential should accurately reflect the costs, and a tariff charge must be drawn up to suit the overall cost of the community. The electricity tariffs for large consumers are based on the consumption of energy and maximum demand, which measure both active power (kW) and apparent power
(kVA). The highest single demand recorded will be used to establish the consumer's annual charge to recover the capital and service-related costs of the energy supply
[61].
3.3 TARIFFS
Each tariff has its own unique features. These features are a function of the tariff design objectives and a compromise between cost reflectiveness, demand side management pricing signals, simplicity, consumer requirements, etc. In order to be efficient and cost effective, it would be prudent for the consumer to execute a load profile analysis and then select the best tariff to suit the system's load profile. The analysis will also indicate the cost saving on the electricity bill and add operational time to the plant without any further intervention [11, 18, 53].
Page 29 3.4 TARIFF OPTIONS
ESKOM has various tariffs and charges illustrated in it's 2001 publication, however, only megaflex, miniflex and ruraflex tariffs are discussed in this study. These tariffs are divided into three time periods (peak, standard and off-peak) which are classified as time-of-use (TOU) tariffs.
Megaflex - consumers with supplies of 1 MVA and above:
Who can shift the load to define time periods.
Who are not fed off rural reticulation networks [61].
Miniflex - consumers with supplies of 100 kVA to 5 MVA:
Who can shift the load to define time periods.
Who are not fed off rura reticulation networks [61].
Ruraflex - consumers with 3-phase supplies fed off rural reticulation networks:
Who can sift the load to define time periods.
Who take supply from 400 V including 22 kV [61].
Time-of-use - tariff rates that are time differentiated. Reduction in cost can be achieved by shifting the load into a cheaper period where most of the electricity is consumed [61].
ESKOM introduced its first tariff (time-of-use) in 1991. The impact of this new tariff was of great concern to many consumer tariff bills, as the utility had initially stated a
4% too high tariff in order to reduce the financial risk to itself In addition to this, was
Page 30 the time-of-use (TOU) tariffs from the consumers load patterns, which resulted that the tariff charges on the time-of-use was effectively 5% higher than the tariff expected on the active power (kW) and apparent power (kVA) demand with power factor correction installed. Minimum tariffs were charged based on the fact that sufficient power factor correction was installed for both the apparent power (kVA) and time-of- use (TOU) tariffs [19, 23, 40].
The kilowatt-hour (kW.h) tariff is to cover the production cost of energy consumption, which includes the complete power distribution system, fuel, capital, equipment, distribution cost, administration, operating and maintenance thereof [16].
After power factor correction equipment has been installed and the consumer has changed over from active power (kW) to apparent power (kVA) demand, any financial benefits resulting from a reduction in the monthly tariff charges are passed on to the consumer directly [1, 19].
3.5 TIME-OF-USE (TOU) TARIFFS
In March 1997, ESKOM developed a long-term tariff plan that applies differential increases to the various available tariffs to become more cost reflective [22]. The tariffs applied to voltages, which were supplied to consumers from 6.6 kV to 132 kV, were affected in particular. Since the increase of differential between apparent power
(kVA) and active power (kW) maximum demand (MD) in 1997, the techniques applied have at the same time reduced the cost of power factor correction equipment in real terms.
Page 31 The price increase for 1997 was 5% on average higher than during 1996 [22]. Due to the ever-increasing number of consumers and new domestic connection, the authorities have implemented the time-of-use tariff where the use of more expensive power stations was to feed the supply grid only during peak times. This higher rate on time-of-use was effectively moving the consumers from off-peak hours into low and cheaper tariff periods [19]. Time-of-use (TOU) billing is used as an energy management control tool as the tariff structure matches the generation cost [23].
3.6 TARIFFS ON POWER FACTOR
The power factor at which electricity is consumed has a significant impact on the electricity bill. It has an effect on the cable sizes and life cycle of electrical equipment, and it ultimately affects the power quality in the network. From the power factor curve in Figure 3.1, kW tariff of average price (11c/kW.h) is fixed regardless of the value of the power factor, whereas the demand measured on kVA, the tariff per unit will reduce as the power factor improves to unity [1].
16
2 15 — kVA t 14— Break Even a 13 — 0.90 4,rn LO 12 cT, cc kW 11
10 c ZE). rn c POWER FACTOR
Figure 3.1 Comparison of standard-rate 1111
Page 32 The comparison of the two tariffs (apparent power and active power) as indicated in
Figure 3.1 shows that the break-even point is 0.9 but when a power factor of 0.71 is applied, the kW rate price shows 10.8c/kW.h compared to 12.2 c/kW.h on the kVA rate. From Figure 3.1, it is clear that only the apparent power (kVA) is affected by the power factor and that the active power (kW) cost is not affected by a low or high power factor. It is for this reason that ESKOM has decided to do away with the active power (kW) tariff and to change over to the new apparent power (kVA) rate charge.
The present ESKOM tariff charge allows a free reactive charge to the value of 30% of active energy [11]. This is equivalent to a power factor of 0.96. The reactive energy consumption is measured as an addition to the other energy used and added to the bill where it exceeds the free allowance. A charge rate for Megaflex, Miniflex and
Ruraflex at c/ kvarh will be applied per unit used [1, 11, 53]. The free allowance of reactive energy is shown in Figure 3.2.
Figure 3.2 Vector for free charge loads 1111
Page 33 3.7 COST IMPLICATIONS OF TIME-OF-USE
Time-of-use (TOU) tariffs are suitable for consumers who are able to manage their energy consumption and maximum demand according to ESKOM's specified time schedule.
By using load shifting abilities, and with reasonable load profiles, the tariffs were
made attractive to consumers with great financial benefits.
The first step towards electricity cost saving is to maintain a reasonable power
factor. These costs can only be reduced if the tariffs are maximum demand
(apparent power) or reactive energy charged. These savings on energy can be
achieved by improving power factor at point of consumption [14, 22].
ESKOM also indicated that consumers with higher voltage supplies will be
charged lower prices and consumers with lower voltage supplies will be charged
higher prices [22].
3.8 IMPLICATION OF TARIFFS
Tariffs are designed to guide consumers automatically into an efficient way of using
electrical power. The two-part tariff is designed to cover both the capital investment and the operating cost [15]. ESKOM's 1997 two-part tariff consists of energy kilowatt-hour (kW.h) and demand (kW) or (kVA), Figure 3.1 indicates a break-even
point where the two costs are equal [22].
Consumers with load factors lower than the "equal cost" will therefore have a higher
proportion of demand charges and vice versa. For consumers (business and general),
it is most appropriate to operate for 9 hours per day, 5 days per week, with a load
Page 34 factor of < 25% at a basic cents / kilowatt-hour (kW.h) rate [16, 18]. R.L. Sellick states that load factor (LF) is defined as the ratio of the average load to the maximum load [40, 51].
Where L load factor = kilowatt-hour (energy) (3.1) apparent power (kVA) (demand x T x P)
T = period over which kW.h and kVA
are measured (in hours)
P = power factor
Where a consumer's load factor is more than 30% at night (08:00 pm — 07:00 am) and weekends, the two-part energy rate tariff is more appropriate. Consumers with a non- regular monthly load profile should make use of this tariff structure [15, 16].
Two-part tariffs are applicable to consumers who have a regular load pattern with a load factor greater than 30% [16]. The three-part tariff essentially consists of a charge for maximum demand and a non-time related energy charge. Consumers who are able to maintain a lower maximum demand from 16:30 to 18:30 (Monday to Friday) are offered a financial discount. Consumers who exceed their daily demand can use night and weekend energy supply at lower charges. For a consumer with a load factor of
50%, the total demand to energy charge is approximately in the ratio of 50%. Plans for the future are to change to a time-of-use tariff (TOU) with time-related energy and maximum demand rates [14, 15, 16, 40]. Singh confirms that plans are in progress with ESKOM to change to a time-of-use tariff with time-related energy and maximum demand rates [16].
Page 35 On 1 January 2001, the average price of electricity from ESKOM increased by 5.2%.
This made it possible for ESKOM to comply with its contract with its consumers to reduce the price of electricity in real terms by 15% between 1994 and 2000. The voltage discount differential will continue in the forseeable future. 'The active power
(kW) minus apparent power (kVA) differential will continue until it reaches equivalence for a apparent power (kVA) demand with a power factor of 0.85, compared to the 1996 equivalent power factor of 0.93" [22]. There are financial benefits in changing from active power (kW) demand to apparent power (kVA) demand tariff, which are passed on directly to the consumer [18, 19].
0 0.7 0.72 0.74 0.76 0.78 0 8 0.82 0.84 0.86 0.88 0 9 0.92 0.94 0.96 0.98 1 Power factor
Figure 3.3 Increase of capacitance required as unity power factor is reached 1161
The Figure 3.3 is based on a maximum demand of 500 active power (kW) and indicates that 14 reactive power (kvar) capacitance is required to improve the power factor by 1%. The 1% is taken continuously from 0.70 to about 0.90, which presents
± (20 x 14) 280 reactive power (kvar). From 0.90 to 0.99, it gradually increases until it reaches 0.99, which requires 30 reactive power (kvar). To obtain unity power factor from 0.99 to 1, it increases significantly to 71 reactive power (kvar). However, the
Page 36 last 1% might not be economically justified to the consumer and cannot be taken as a general rule, as all plant systems within their environment will have their own characteristics. The above curve refers to an embarked programme of providing cost- reflective tariffs to consumers with a load of 500 kW [16].
3.9 TWO-PART TARIFFS
For a supply utility to arrive at a division of cost on a two-part tariff supply, all costs on capital investments and running costs will have to be grouped into two sections
[14, 15, 18, 19, 40].
3.9.1 Capital investment costs
The actual cost of an electricity supply utility have to be recovered by the tariff income, to cover the capital investment cost below. If funds are borrowed to finance operations expected to result in a gain, the interest to be paid must be less than the expected gain [15, 62].
Interest on borrowed capital to finance the project, etc.
Interest on capital investments, etc, to be subtracted.
Contributions to the compulsory capital development fund (c.d.f ): 3% to 5%.
Extension charges from supply utility (if any).
Page 37 3.9.2 Running costs
The running cost is that group of costs experienced continually over the useful life of the activity [62].
Management and engineering of the system.
Operation of the system, maintenance, faults, distribution repairs, etc.
Supply utility kilowatt-hour(kW.h) charges.
3.10 CONCLUSION
From ESKOM' s point of view, the consumers receive an electrical power supply around the clock, uninterrupted, to fulfil their needs and develop their environment.
In order to provide the above supply, ESKOM has implemented various tariffs and charges to ensure sufficient supply on demand from the consumers.
In the application of the various tariffs, ESKOM automatically binds the consumer to the following conditions:
To improve and optimize the plant in order to prevent abuse of the supply of
electrical power.
To minimize production costs by improving the power factor in reducing the
reactive power (kvar) ratio to power factor.
To improve the load factor.
To improve the time-of-use (TOU).
The above categories are only a few of the possible tariff options that are available.
However, these covered in this chapter, if implemented effectively, should certainly
Page 38 recover the cost associated with the actual generation of the energy supplied and the capital investment to transmit the energy distributed to the consumer.
From the demand side, it should be clear from ESKOM' s standard tariffs that the two- part tariff system, when applied in correct proportions, will provide an incentive to improve the load factor sufficiently, thereby contributing to an efficient utilization of electrical power supply.
Plant running costs could be reduced with power factor correction improvement, which would also result in a more steady rising of electricity tariffs. Due to various factors, maximum demand tariffs vary throughout the country. The reduction on kVA maximum demand of a plant will result in a capital saving. This saving will service the capital invested to install the power factor correction system over the pay-back period. In addition to the capital saving, there is also energy and future equipment saving.
Page 39 CHAPTER 4
LOAD MANAGEMENT
4.1 INTRODUCTION
The concept of electric load management is to change the pattern of the consumer's electricity use. The philosophy behind load management is to plan, develop and implement programmes in order to ascertain the daily and seasonal electric load profiles of consumers so as to improve overall system utilization, maintain financial stability and lower overall costs [32, 33, 34]. Accurate information relative to the electrical demand and energy of usage patterns of each type of consumer is required in order for the electrical utilities to provide a reliable, efficient and safe service to the consumer. This information allows the utility to plan adequate generation, transmission and distribution system sizes, to accommodate individual electrical services, to formulate rate structures based on services cost, and to determine the effects of load management strategies.
In general, the power factor of the system is determined by the nature of the load itself With normal lighting circuits, the power factor closely approaches unity, but with arc lamps the power factor may be quite low, due partly to the inductance of the operating inductor within the lamps [13].
Page 40 The following factors will have an effect on the consumer's electricity bill, each of
which could be managed by the consumer in order to reduce the bill:
Load factor (LF).
Time-of-use (TOU).
Power factor (PF).
Tariff choice (TC).
4.2 LOAD MANAGEMENT PLANNING
Len Baker defined load management as the process by which an electricity supply utility modifies consumers' load demands in order to assist in achieving its objectives
of providing an adequate, reliable, economical and safe supply of electricity [38].
Load management has become a fully accepted utility corporate planning option. The advantages of offering economic relief, energy savings and financial relief are well established. However, consumers are more concerned about production than power supplied to the load. The implementation of load management to the consumers will only become a high priority once they experience the effort to generate electric power.
Unfortunately, the consumer is on the power-receiving end and therefore has an entirely different approach to the above statements. Due to the easy availability of electrical power and the relatively low tariffs, the consumer does not invest in load management to the same extent as the utility.
4.2.1 Planning
For the utility, it is important to have a well-established load management program in place, which will also match the consumer's needs and requirements. This program
Page 41 will benefit both the utility and the consumer as it will ensure availability and reliability of a stable load supply.
Load management planning has four steps:
"The first step is to choose the load shape changes that the program is to achieve.
These changes represent the planners' strategic goals and operating objectives (such as increased system utilization or deferred need for new generating units)" [30].
Within the planner's strategic goals and operating objective, the following changes are represented: increased system utilization or deferred need for new generating units.
"The second step is to determine how the desired load shape changes are to be achieved, that is, to select the end-uses and load management alternatives that will produce the desired changes" [30]. The following questions could be asked:
How does each consumer contribute to the system's load?
Are the consumers seasonal?
Are they becoming more efficient over time?
How many new appliances are purchased every year and by whom?
What techniques exert the desired influences on the consumer?
"The third step is to evaluate costs and other non-energy impacts of the load management program and, if necessary, iterate through the previous steps again".
"The final step is to plan ways to implement the program" [28, 30, 37, 40].
Page 42 The above four steps will be different for every plant, and the success of introducing such a load management program will depend largely on the consumer or company management who will have to enforce the implementation and execution of such a program.
Load management has become a fully accepted utility corporate planning option.
R.B. Comerford states that load management is considered to be any deliberate reshaping of the behind-the-meter or consumer-side load curve — resulting either from voluntary actions by the consumer or any actions of the utility, which directly impacts on the consumer [31]. Electric energy is the product of power and time, and either of these represents the energy consumed in the demand interval. Loads change over time and apart from the fact that they increase, their nature also changes, particularly as electric loads are added and start introducing significant harmonics, such as computers, the variable speed drives, electronic ballasts for fluorescent lamps, etc.
[31, 33].
When any deliberate reshaping of behind-the-meter on the consumer side of the load curve is considered, load management comes into force. This can result either from voluntary actions by the consumer or the utility, and impacts directly on the consumer.
Page 43 4.3 LOAD MANAGEMENT CATEGORIES
Load management activities can be categorized into four general areas:
Load factor.
Interruptible loads.
Strategic conservation.
Energy management [21, 31].
4.3.1 LOAD FACTOR
Due to the fact that load in most cases is not constant and has a variation throughout the year, high and low load peaks are common to the consumer's load profile. Figure
4.1 indicates that the average cost per kilowatt-hour kW.h is a function of the load factor. The reason for this is that with increasing load factor, the demand charge is recovered over increasing amounts of energy, and that the demand charges are recovered as the load factor increases [11].
The average cost as a function of the load factor is indicated in Figure 4.1, as follows:
When the load factor is 1.0, the average price (c/kW.h will be 10, but when the load factor declines to 0.2, the average price (c/kW.h will be 27.5, after which it will remain fixed at zero [11]. ESKOM has placed a fixed average price at the above point, namely "price cap", which will change from time to time depending on the tariff structure of the consumer's supply.
Page 44 40 35 —
h) 30 — Price Cap /kW. 25 — c (
e 20 — ic
Pr 15 — e 10 — 5 — Averag 0
0 0 0 0 0 0 0 0 0 0 0 0 •-• Cs1 el Q u, cg N. 0:? co 9 6 6 6 0 6 6 0 0 0 6 Load factor Power factor = 1
Figure 4.1 Average cost as a function of load factor [11 1
Improvement of the load factor by load management will avoid peaks in the demand, and will result in a meaningful reduction in the electricity cost. However, load managing requires a comprehensive load study, which will result in plant activity, process planning and monitoring in the start-up of large plant loads phasing out over a metering integration period.
4.3.2 INTERRUPTIBLE LOADS
Interruptible loads involve communication systems and are by nature controlled by utilities.
There are three different loads, as follows:
Interruptible electric service.
Appliance control.
Demand limitation.
Page 45 4.3.2.1 Interruptible electric service - In general, large industrial and commercial
utility consumers are well known for their interruptible services. The
utilities normally notify the consumers to reduce their load whereby the
service charge involves an incentive rate.
4.3.2.2 Appliance control — This involves a technique of communication between
the utility and certain appliances on the consumer's premises. The consumer
will grant permission to the utility to disconnect certain appliances during
certain operation periods, fully or partially, depending on the response to
peak load conditions. This will reduce the load on the main system. Peak
loads are restricted via a logical device to a level, that enables the utility to
determine the peak load's possible location. The more intense the
application, the more reliable becomes the planning [31, 40].
4.3.2.3 Demand limitations - In this instance, the consumer enters into a contract
with the utility for a fixed maximum electrical supply operating on restricted
equipment. This type of supply will be charged at a higher tariff
irrespective of usage.
4.3.3 Strategic conservation
"Included in the context of load management is strategic or controlled conservation.
This is not the conservation which results purely from price stimulus. Strategic conservation results from an active utility involvement in the marketplace" [31].
Involvement refers to encouraging the purchase of high efficiency appliances as well
Page 46 as the development of programs to include the power factor correction of plants. The following major generic activities in controlled conservation are of interest to utilities:
Plant efficiency improvement.
Environment.
Building designs.
Plant life-cycle.
Load demand analysis.
Conservation is categorized as a non-load management activity by some consumers.
However, it is technically more accurate and consistent with IEEE's contemplated load management definition [31, 40].
4.3.4 ENERGY MANAGEMENT
Successful energy management starts with load planning, which means arranging plant machinery and process activities on and off. This will ensure that a minimal energy load is utilized during peak times (for time-of-use only) and that various individual loads within the plant are not at their highest level at the same time. The planning process will have the result that plant, processes and production might be shed or scheduling will occur out of peak periods. After achieving the above, the production planning programme may then be put in place, which provides anticipatory control. The system will automatically control and measure the plant to ensure the targets are met without overshooting, while maximum production takes place [14, 32]. Management scheduling has one problem: it requires intelligent supervision, which means: a person with the full knowledge of the plant programme and load scheduling must go through a set of events that follow a certain sequence to
Page 47 ensure the load meets the maximum target and if it is in danger of being exceeded, the load must be reduced [31, 34].
The function of energy management is to implement a strategy that will avoid and overcome switching loads on and off in order to respond to short-term needs so as to meet targets at half-hourly sessions. Load levels can be optimized if careful planning and scheduling in conjunction with automatic control are implemented to operate the plant.
While cost is kept to a minimum with little or no wastage, the production will have the availability of energy. Once the production plan is successfully implemented and managed well, load shedding will only be required occasionally [27, 29, 34]. Where tariff rates are time differentiated, a considerable cost saving could be achieved if loads are scheduled in such a way that electric power is consumed during off-peak periods, which are cheaper to supply [11, 19, 53].
4.4 TIME-OF-USE LOAD SCHEDULING
Energy management is load scheduling, this could result in possible energy and capital savings from the system. Based on the load requirements, the system will turn various loads on or off automatically during the day or night. Plants such as air- conditioners, exhaust fans, hot water heaters and electrical furnaces are typical loads for real-time control as they lend themselves to this type of control [34, 35, 37].
Page 48 With real-time control, the above units could be turned on and off during the night
and switched on an hour before the building re-opens. Real-time control would allow
the air-conditioners to be turned off during the night and turned back on about an hour
before the building re-opens. The air-conditioners could run during the day but a
large amount of energy and money could be saved [14, 34, 35, 40].
There are certain loads that also need the ability to be manually operated as they
require a total bypass of the system. Although programmable controlling often pays
for itself via load scheduling, the system could still achieve greater savings.
4.4.1 Eskom's Megaflex / Miniflex / Ruraflex
Table 4.1 indicates the three energy tariffs on the time-of-use periods as introduced by
ESKOM in 1998 [11]. The energy periods, i.e. peak, standard and off-peak periods,
are differentiated into three periods. During peak and standard periods, the Megaflex
demand tariff is applicable. ESKOM's actual rates for 1998 are shown in Table 4.1
[11, 53].
Energy (c/active power (kW)h) Demand (R/active Peak Standard Off-peak power (kW)) Megaflex R11.09 20.02 11.23 6.44 Miniflex Nil 30.54 11.23 6.44 Ruraflex Nil 35.48 13.40 7.79
Table 4.1 Average time-of-use cost 1111
ESKOM supplies electricity continuously to the consumer on demand, twenty-four hours per day, throughout the year, notwithstanding the fact that the consumer might only use the energy supplied during certain periods. Within the twenty-four hour
Page 49 window period, there are time-of-use periods, i.e. peak, standard and off-peak periods, which by nature of the work and way of operation, depending on the environment, create a balanced load pattern on the ESKOM supply network.
The periods currently applied are shown in Figure 4.2. Peak periods correspond closely to the times when the national system peak occurs [11, 16, 53]. The time periods indicate in Figure 4.2 that the peak periods during weekdays are scheduled between 07:00 and 10:00 and 18:00 and 20:00. The 07:00 and 10:00 period is when most plants and factories are started up and these processes demand high electricity loads. In the late afternoon, from 18:00 and 20:00, the high electricity load demands are usually for household or early night-shifts at plants or factories. If the peak periods could be rescheduled by one hour, i.e. between 07:00 and 08:00, and 10:00 and 11:00, gaining one standard hour, and between 20:00 and 21:00, both ESKOM and the consumer would benefit in saving by utilizing the demand and supply of the energy. ESKOM has therefore provided the time-of-use periods as indicated below for peak, standard and off-peak periods over a twenty-four hour time scale during weekdays, weekends and holidays.
Page 50
HIGH DEMAND PERIODS
WEEKDAYS 111111011111111111'z 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
SATURDAYS
HIGH DEMAND PERIODS WEEKDAYS
A1111111 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 11 1111111111 11 11 111 111 11111111111 11 111111 1 11111111 1 1111 111111 1 1111 SATURDAYS
SUNDAYS = OFF-PEAK 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 111111111111111111111111111111111 1111111111111111111111 111111111111111111111111111111 Peak Standard 11111111 Off-peak
Figure 4.2 Demand periods for weekdays fly
4.4.2 ESKOM's Night-save
"Night-save, a three part tariff with basic charges, demand charges and energy charges as components, was ESKOM's first "time-of-use" tariff. This tariff disregards demand during off-peak periods. Consumers can therefore consume electricity at night at a very low marginal cost" [11, 16]. The periods for this tariff are shown in Figure 4.3.
NIGHT-SAVE PERIODS WEEKDAYS
111111111111111111 • • 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 1111111111111111111111 1111111111111111111111////11111111111111 SATURDAYS 1111111111111111111111111111111111111111111 ,1,1J,11111111111111111 1111111111111111111
Peak 1111111 Off-peak
Figure 4.3 Demand periods for night-save fly Page 51 4.5 TIME-OF-USE MAXIMUM DEMAND
Both maximum demand (MD) or time-of-use (TOU) tariffs can be used for billing
charges. Small consumers billed on kilowatt-hour (kW.h) tariff, will be charged on
time-of-use only, whereas large consumers will be charged a combination of kilowatt-
hour (kW.h) and active power (kW) demand tariffs with half-hour maximum demand
[16, 23, 34].
To benefit from lower rates (Figure 4.3), consumers should schedule their energy
consumption to off-peak times as the TOU tariff is designed to encourage this action.
"This tariff more accurately reflects the true cost of producing a service and penalizes
high consumption during the peak, high generation cost periods" [17]. Maximum
demand tariff encourages the consumer to prevent high short-term consumption
intervals, which tend to overload distribution (plant, switch-gear, transformers,
transmission lines, etc.) equipment for short periods. This requires a more costly
infrastructure [16, 14, 34].
"Time-of-use tariffs are quite comprehensive in their structure, and while we will not
go into too much detail here, suffice it to say that there are three TOU periods":
Peak (most expensive).
Standard.
Off-peak (least expensive) [16, 18, 19, 23, 34].
The actual times of day differ from summer to winter (e.g. in winter there is a
morning and evening peak period, but in summer there is only a morning peak
Page 52 period). The standard period is during the day, while off-peak is during the night [18,
28, 34].
Due to the weather pattern, the actual times of day between summer and winter differ,
(e.g. during winter there is a morning and evening peak period, and during summer, there is only a morning peak period [17]. Standard period is during the day, whereas off-peak period is at night [18, 28, 34]. Sundays are all off-peak periods, whereas
Saturdays have no peak period, only Standard and off-peak periods. Public holidays depend on a particular day, as they will be deemed to be either a Saturday or Sunday period [30, 34].
Regarding the tariffs of the above periods, there is quite a difference between peak and Standard periods, and between Standard- and off-peak periods, where possible.
It is therefore more encouraging to use the off-peak periods where possible. Taking into account that the maximum demand charges under a time-of-use (TOU) tariff are roughly 30% of the Standard maximum demand, it might be less costly to operate within the peak period and incur a maximum demand penalty charge in the Standard period [16, 17, 19, 30, 34].
4.6 THE NEED FOR LOAD SHEDDING
There is often also a need for load shedding. It is essential for the load shedding system to ensure that critical loads within the plants will have electrical power available. In order to achieve the above, non-essential loads during lack of power in the network or plant will be switched off
Page 53 A lack of power could be caused by a loss of utility supply, or a disconnection from the network or grid or system generator capacity failure. One or more of the following load shedding systems can be implemented:
Primary load shedding.
Frequency load shedding.
Manual load shedding.
Maximum peak power demand shedding [27, 34].
4.6.1 Primary load shedding
Primary load shedding systems include the following main functions:
Electrical network configuration to be checked continuously.
Electrical energy balance to be checked in every configuration continuously.
Dynamic priority load tables to be calculated.
Generation of the load shed command, if required.
Computer system to be supervised.
Generation of reports after load shedding.
Guiding and informing the operators [27, 34].
4.6.2 Frequency load shedding
Frequency load shedding is primarily a back-up of the primary load shedding function, which has been described above. When this function fails (primary load shedding), the frequency load shedding will continue to shed the load. "Frequency load shedding not only takes the absolute frequency limits into account, but also calculates the frequency time taken between the individual loads. This gives a more accurate load shedding. The frequency limits are received in from frequency relays by digital inputs in the computer" [27].
Page 54 4.6.3 Manual load shedding
If the operator wishes to issue a plant-wide shed priority, he will require an
accumulated load table for the total actual plant load. Assessment of load shedding
can be made when and where applicable during plant operation activities [27].
4.6.4 Maximum peak power demand shedding
When maximum power is taken from the utility grid, superseding the maximum in-
house generation amount, certain priorities shed automatically. Block interval power
demands determine the maximum import power. With this method, the load
mechanism can be deactivated from the supply and can determine which load
priorities may be shed automatically by this function. Prior to load shedding, an
audible alarm is created. This will allow time for action to review the situation [27,
34, 37].
4.7 DEMAND CONTROL
In determining whether a consumer qualifies for maximum demand control, one can
look at the electricity consumption in the past few months. Although the production
rate might be constant over the last months, and there is a significant change in
maximum demand from month to month at certain periods, it will clearly indicate that
the consumer should benefit from a maximum demand control system [20, 23, 37].
By implementing a demand control system, it will control the maximum amount of
power supply that the consumers demand from the utility by shifting their half-hour
peaks into lower demand periods [30, 37]. Ideally, the consumers' load factor should
be in unity, meaning that throughout the month their consumption should be constant.
Page 55
Figure 4.4 indicate the various peak load intervals between 10:00 am and 2:00 pm.
[22, 29, 37].
Even when production remains constant, it might be found that demand differs
considerably from month to month due to time-of-use and environment conditions.
This will indicate that certain tasks, routines or processes have been executed
irregularly or infrequently out of phase with the set production plan. The question is:
can this task be rescheduled into a lower demand period for execution [27, 28, 30, 31,
37]?
—41-- Peak Interval kW d- n Dema
Time 1 1 II [ I I 12 2 4 6 8 10 12 4 6 10 12 Midnight A.M. Noon P.M. Midnight
Figure 4.4: Typical demand profile without demand control (35]
Demand charges are based on the maximum amount of energy used in any 15-minute
intervals during a billing period. Figure 4.4 indicates a typical demand profile
without any demand control [28, 31, 35]. Demand charges are based on the peak
periods and no matter how low the consumer's demand might be during the rest of the
billing period, the demand charge will not be reduced [23, 28, 35]. The aim is to
produce a load profile that will avoid peak (load) periods, and to produce a demand
profile as indicated in Figure 4.5.
Page 56 W k Selected max demand d- man De
Time I I I 1 1 11 I I I I 12 2 4 6 8 1 10 12 2 8 10 12 Midnight A.M. Noon P.M. Midnight
Figure 4.5: Typical demand profile with demand control f.351
By shedding (turn off) and restoring (turn on) various loads, the demand profile can
be controlled. It should also be determined which load can be controlled without
causing undue discomfort to the consumer [23, 27, 31, 35]. Load management is a
process of allocating load to be at a time that causes the minimum active consumption
and prevents overloading effects.
4.8 CONCLUSION
From the supplier's point of view, all the necessary steps for an effective and
sufficient load management programme that are required to supply the consumer with
the necessary reliable and cost-effective electrical power supply have been put into
operation. ESKOM also provides the consumers with a variation of load tariff
structures to assist them in load managing their supply and to utilizing it to the
maximum benefit.
This chapter guides the readers to manage their electrical power by using the tariff
charges as a tool and to planning the plant lay-out in order to accommodate the
Page 57 in mind, the consumer can avoid maximum demand charges. In establishing this, the consumer can maintain full production without load shedding or alternatively re- schedule the over-loaded activity.
Load management has great potential financially when time-of-use is integrated in the process planning program of any consumer, provided that a full environmental study is conducted to highlight scenarios such as plant lay-out, type of process, electrical power supply required in apparent power (kVA), characteristics of plant and equipment, daily and hourly time of operating, past history on supply and demand apparent power (kVA) and kilowatt-hour (kW.h), time-of-use, scheduling and shedding schedules, and future production plans.
The above activities are key factors in the settings and limitations to develop the right load management programme for a particular plant or operation process. This effort of plant environmental evaluation should have the result that the literature as set out in this chapter, when applied correctly, will benefit both the utility and the consumer financially. On the longterm programme, it will also add life-time to the plant and equipment. With an action of discipline, load management should ensure immediate capital saving.
Page 58 CHAPTER 5
CASE STUDY
5.1 INTRODUCTION
This final chapter addresses a hypothetical case study in which certain aspects of this study will be illustrated. Since the subject of electricity supply and demand is too comprehensive to be covered in this report, only two aspects of the said subject, were covered, namely:
Power factor correction.
Load management.
Power factor correction is usually financed from borrowed capital, and interest payments have to be made. Due to the fact that the use of power factor correction equipment results in a monthly tariff saving, less the interest and depreciation charges, the installation should repay the borrowed capital in a reasonable period.
During above changing period, technical disadvantages such as overloading, plant loading, ect., should prove to be more efficient and reliable, therefore reducing cable size, switch-gear and improve voltage regulation, resulting in the motivation of power factor correction [1, 3, 4, 5, 46]. The consumer will be charged with a more favourable tariff charge by the utility resulting in the saving of more capital.
Page 59 5.2 PROBLEM STATEMENT
In order to justify the need to implement a power factor correction system, a full plant and power usage will have to be executed. The power supplied in active power (kW) and the power used in kilowatt-hour (kW.h) and apparent power (kVA) will indicate the level of power factor correction one requires. It will also be necessary to investigate the power distribution daily and monthly so as to determine the need to apply load management to the consumer. During this investigation, the consumers will automatically be led to invest in the above two aspects of plant improvement because they will be convinced by the advantages that follow.
"Obviously the annual interest and depreciation charges must not exceed the annual tariff saving. There is therefore an optimum value of power factor beyond which it does not pay the consumer to correct" [10].
The case study will cover the power supply and demand for a factory plant so as to analyse and briefly discuss the characteristics of power energy usage, power factor, load management and cost, which are consumed in the system.
5.3 CASE STUDY
A factory plant is operating 9 hours per day for 300 days per annum, with a maximum demand of 700 apparent power (kVA) at a power factor of 0.7 lagging.
The question to be addressed is: What would the implications be if the power factor were to be improved to a final power factor of 0.96 lagging. Rapha Pretorius and
Associates states that R120 per reactive power (kvar) would be a realistic cost to apply as reactive energy improvement equipment with a supply voltage of 500 volts.
Page 60 ESKOM's tariffs and charges for 2001 on Miniflex would be used in the above case study [57].
The following issues are to be considered:
Power factor correction.
Load management.
Compound amount on capital.
The above information is important in order to establish the upgrading of the plant and the system requirements so as to ensure a reliable and feasible energy supply and demand. Daily monitoring of the above is required for accurate processing and planning for the power driven energy to be used so that the correct load management system could be installed.
5.4 APPROACH TO THE CASE STUDY
In order to establish what the implication of the above issues would be as related to the case study and whether it would be cost effective to implement power factor correction and load management as well as economic feasibility, the following scenarios will be attended to:
5.5 POWER SUPPLY AND IMPROVEMENTS
Power load distribution.
Power factor correction (PFC)
Annual energy cost before power factor correction.
Annual energy cost after power factor correction.
Annual energy cost saving after power factor correction.
Page 61 Capital cost to improve power factor correction to 0.96.
Pay-back time on initial capital.
Load management (LM)
Annual energy cost before load management.
Annual cost saving after load management and time-of-use.
Total annual cost saving after load management and power factor correction.
Equal payment series with compound amount on capital (Over 10 years at 12% interest per annum)
Amount on power factor correction after pay-back remaining 7 years.
Amount on load management after 10 years time-of-use.
Grand total compound amount on capital saving.
The above scenarious are detailed in a summary, i.e. where a comprehensive calculated study `ANNEXURE A'(on case study) can be referred to at the end of
Chapter 5.
Page 62 le) SUMMARY OF THE CASE STUDY CHAPTER 5 POWER SUPPLY AND IMPROVEMENTS a s 0 U 0 a PG W W a i POWER FACTOR r-: ••••1 0:1 r- O O 0 O a) tN cf) r - M Ia at. O 1/4.0 er
WER FACTOR LAGGING,
POWER FACTOR CORRECTION U O E- co oo .0 'gcn0 co. 0>CU .... .-. :or ...4 CU 0(1) = 0 U. 4-1 ca CU 0En C.) V) WIGel'a. 0 00> I. a) cl.to ,... s... 0 U = I-. o U O.) ta. o R289 663-00 N en .,.. tr. al 0 0 0 I-. 0 1... 1... c) a) 0 t...... 3 `. t0 R283 819-00 4-1 .... CT c4 "zt e 0 0 9 U er t..) ... I... t.) 1... 15. a) a.) = Q. = • et o I. ni p.. ,. ■ 0 00 . C.) .... to-• ■ 0 O ..., r, C.) 0 0 0 i•• 0 a.> 0 0 U 0 0 CLI ;.., 1... 3 0 ■ I ■
Pay-back time on initial capital — 2,884 years - estimated 3 years
12261 661-00 c+-1 (V en C`4 0 In 0 00 tN 9 -• 8 ect O b y > o E a U O 0 CZ 8 A
tko 0.) E
COMPOUND AMOUNT ONCAPIT AL 6 1■ rx - p rn 1t .- 6
I Amount on load R388 844-87 O 'TZ O O 0 O 0 0. 00 Cl) R538 606- 16 f CC 00 0.)
5.7 CONCLUSION
Although chapter 5 is only a hypothetical case study, it is of considerable value because there is so little technical data available on plant operation and utilisation of power supply that could be of any use to improve plant systems. The case study was executed on two aspects:
Power factor correction, and
Load management.
By implementing a power factor correction system, the power factor was changed from 0.7 to 0.96. Although it has cost the consumer R42 840-00, this capital was recovered in less than three years, after which there should be an annual cost saving of
R14 844-00. The power factor correction could also ensure a larger life-cycle on power equipment as it would be exposed to less overloading, which would result in a more reliable plant system and power utilisation.
The electrical power utilisation has indicated that the plant could be improved by re- scheduling certain activities from peak time to off-peak time. This action resulted in a further capital annual saving of R22 158-00. In addition to the above savings, the change in general have also other benefits, which will have an impact on the plant and its environment, if managed effectively and the standards of quality remain in place.
The production should be more cost effective and the plant will be more disciplined due to the above mentioned improvements.
Page 64 In essence, the case study has proven that ESKOM has reason to assist the consumer to be more conscientious in the utilisation of the electrical power supply as it holds great cost implications with regard to power factor correction improvement and load management.
Page 65 CHAPTER 6
CONCLUSIONS AND RECOMMENDATIONS
6.1 FINAL CONCLUSION
This dissertation has highlighted and described various methods that are related to the stability of the consumer's power supply as well as the efficient utilization of the power within the consumer's environment. ESKOM has implemented a strategy whereby the consumer could optimize the power supply and, above all, gain financial benefit on capital invested within three years.
By changing from active power (kW) to apparent power (kVA) power supply and through the implementation of new price tariffs, ESKOM forces the consumer to improve the plant operation that will in turn, optimize the power supplied by
ESKOM. The following issues are of concern and are normally managed inefficiently, i.e. load factors, time-of-use, power factor, tariff choices and load management.
However, ESKOM as utility, made sufficient allowances in its price structures to ensure minimum discomfort during the process of change-over or implementing power factor correction and load management systems to the consumer. The consumer is ensured of financial benefit as well as equipment reliability and maintainability by applying these methods and by rescheduling operating periods.
Page 66 6.2 RECOMMENDATIONS
The purpose of this study was to provide the reader with an overview of the various characteristics of the subject that could have an impact on the supply and demand of electric power. This study also indicates the various steps that ESKOM as utility, took to accommodate the consumer in using its power to the optimum level via power factor correction and load management.
The effect of the load factor on the consumer and the utility has to be fully appreciated, since it will encourage the consumer to maximum efficient consumption of electric power. This should also encourage the consumer to improve the power factor instead of just continuing to draw more and more power while the plant could in fact be managed more efficiently.
Working in conjunction with the power factor is the load management programme, which not only controls and monitors the various plant operations and activities of processes during any movement of time, but also provides a valuable technical daily data index system, such as:
High and low peak periods.
The distribution of power utilises in the system that might affect the maximum
demand (MD) of supply.
Various other technical factors that are measured and are important as well as
useful to ensure that the plant or system is utilizing the supplied power to its
optimal levels.
Page 67 It is thus imperative that when applying for electrical power supply, the consumer should provide the utility with as much power consumption details as possible. These details should include not only apparent power (kVA) and plant system power factor, but also a full load management programme. This will assist the utility in determining the maximum demand that the user might reach and decide how to overcome possible power supply interruptions and overloading of the supply network.
The case study cannot be taken as a final rule as each plant and system will have its own characteristics operating in its own environment. The methods applied in
Chapter 5 can be followed to determine the cost effectiveness of the proposed methods. It is important that each plant he evaluated to determine the power required and to what extent the plant would need power factor correction. It is also clear from the study that load management has a valuable effect on the system, i.e. financial cost saving, saving on maintenance, saving on sizes of equipment and saving on electric energy consumed.
Lastly, the study shows that although electricity in South Africa is easily available and relatively cheap, the opportunity to improve and utilize the power more efficiently, should not only result in financial benefits but also in the reliability and improved operation of the plant.
Page 68
ANNEXURE TO THE CASE STUDY
7. POWER SUPPLY AND IMPROVEMENTS
7.1 POWER LOAD DISTRIBUTION • i 143 kVAR3 500 kVARI 357 kVAR2
V CosOi - 0.7 PF CoscD2= 0.96 PF Fig 7.1 Load Power Vector Diagram
OB = kW of load = kVA, x Co* = 700 kVA x 0.7 = 490 kW
7.1 AB = kvar, of load = 11(kVA) 2 - (kW, 2 = 117002 - 4902 = 500 kvari
7.2 AC = kvar2 =kW (tan 4)1 - tan 4)2) =490 (tan 0.7 - tan 0.96) = 357 kvar2
7.3 BC = kvar3 = AB - AC = 500 - 357 = 143 kvar3
Page 69
8. ESKOM'S TARIFFS AND CHARGES FOR 2001
ESKOM's TIME-OF-USE (TOU) SCHEDULES
0 2 4 6 8 10 12 14 16 18 20 22 24 7 Sunday Saturday Weekdays a Fig. 8.1
FACTORY PLANT WORKING (TOU) SCHEDULES
0 2 4 6 8 10 12 14 16 18 20 22 24 7
Fig. 8.2
PROPOSED CHANGE OF (TOU) SCHEDULES FOR PLANT
0 2 4 6 8 10 12 14 16 18 20 22 24 7
Fig. 8.3
Peak Standard Off-peak
ESKOM TARIFFS AND CHARGES FOR MEGAFLEX Active Energy Charges on Demand
Peak 31,89c + VAT = 36,35c/active power (kW)h Standard 11,69c + VAT = 13,33c/active power (kW)h Off-peak 6,72c + VAT = 7,66c/active power (kW)h Reactive Energy 1,35c + VAT = 1,54c/active power (kW)h
Table 8.2
Page 70 8.1 ANNUAL ENERGY COST BEFORE POWER FACTOR CORRECTION
The plant is operating at 0.7 power factor and the active power calculated is 490 kW with 500 kvar. When operating from 7:00 — 10:00 hours peak period, the energy cost calculated will be R160 303.00. The standard hours from 10:00 — 16:00 hours will be
R117 570.00. The cost difference between peak and standard is R42 733.00,
(i.e.A - B). This can be reduced by improving the power factor from 0.7 to 0.96 and by installing a capacitor bank to the plant. It will also be further reduced when load management is applied.
Peak hours from 7:00 — 10:00 = 3 hours Peak hours annually x kW.h tariff x kW
Peak hours cost = 3 hours x 300 days x 36,35c/kW.h x 490kW = R160303.00
Standard hours from 10:00 - 16:00 = 6 hours Peak hours annually x kW.h tariff x kW Standard hours cost = 6 hours x 300 days x 13,33c/kW.h x 490kW = R117 570.00
Reactive energy cost = total annual hours x cost = 9 hours x 300 days x 1,54c/kvar x 500kvar1 = R20 790.00 Total annual energy cost = A + B + C = R298 663.00
8.2 ANNUAL ENERGY COST AFTER POWER FACTOR CORRECTION
When the power factor of 0.7 is improved to 0.96, the apparent power of 700 (kVA) is reduced to 570 kVA and the reactive power is reduced from 500 kvar 1 to 143 kvar3.
This will result in an annual electricity cost saving of approximately R14 844.00. To implement this correction, a bank of capacitors costing R120 per kvar will be installed to improve the power factor to 0.96 and reduce the reactive load by 357 kvar.
Page 71 Cost on peak and standard time remain the same, A + B = R277 873.00
kvar3 annual cost kvar3 = 9 hours x 300 days x 1,54c/kvar x 143 kvar3 = R5 946.00
Total annual energy cost after power factor correction = E + F = R283 819.00
8.3 ANNUAL ENERGY COST SAVING AFTER POWER FACTOR CORRECTION
D - G = R298 663.00 - R283 819.00 = R14 844.00
8.4 CAPITAL COST TO IMPROVE POWER FACTOR TO 0.96
Cost of capacitors to improve power factor from 0.7 to 0.96
@ R120/kvar x 357 kvar = R42 840.00
8.5 PAY - BACK TIME ON CAPITAL INVESTMENT
Power factor correction is a well-known technology that offers an immediate and obvious cash benefit to the consumer. In the case study, the cost of improving the power factor to 0.96 will be R42 840.00. This capital can be recovered over 2.886 years or 34.63 months. If one further considers that the plant has a life-cycle of 10 years, the remaining 7 years x R14 844-00 (annual cost saving) will be estimated at
R103 908-00, not taking compound interest into account, which is very significant on its own.
(K) Pay-back time on initial cost = R42 840.00 / R14 844.00 2,884 years
Page 72
9. LOAD MANAGEMENT
9.1 ANNUAL ENERGY COST BEFORE LOAD MANAGEMENT
A further cost saving is proposed by rescheduling the time-of-use (TOU) during the plant opertions as follows:
Start the plant at 9:00 - 18:00 in stead of 7:00 — 16:00. This will reduce the peak hours to one hour and increase the standard hours to eight hours.
Peak hours from 9:00 - 10:00 = 1 hour 1 x 300 days x 36,35c/kW.h x 490 kW = R53 434.00
Standard hours from 10:00 - 18:00 = 8 hours 8 x 300 days x 13,33c/kW.h x 490 kW = R156 760.00
Reactive energy cost = total annual hours x tariff 9 x 300 days x 13,33c/kW.h x 143 kvar3 = R51 467.00
0) Annual energy cost = before load management =L+M+N R261 661.00
9.2 ANNUAL COST SAVING AFTER LOAD MANAGEMENT AND POWER FACTOR CORRECTION
P) time-of-use hours = R283 819 - R261 661 = G — 0 R22 158.00
9.3 TOTAL ANNUAL COST SAVING AFTER POWER FACTOR CORRECTION AND LOAD MANAGEMENT
Q) Total annual cost saving after load management and power factor correction and time-of-use per annum without compound interest R14 844.00 + R22 158.00 = I + P = R37 002.00
By rescheduling the factory plant process and utilizing the ESKOM Time-of-use
(TOU) tariffs, the consumer will gain a financial benefit. ESKOM' s tariffs and charges in Table 8.2 (Annexure) show a distinct difference between peak, standard and off-peak time-of-use tariff rates.
In the case study, the factory operates three hours in peak time and six hours in standard time, which results in an annual energy cost of R283 818.00. When implementing TOU and rescheduling the factory peak hours from 9:00 — 10:00 and Page 73 the standard hours from 10:00 — 18:00, the electricity cost saving is R22 158.00 per
annum.
Annual cost saving (kvar.h) = C - F =R20 790 - R5 946 = R14 844.00
Cost of capacitors to improve PF from 0.7 to 0.96
@ R120/kvar x 357 kvar = R42 840.00
Pay-back time on initial cost = R42 840 / R14 844 = 2,88 years Estimated 3 year
10. COMPOUND AMOUNT ON CAPITAL
The above two savings might not seem that impressive, but together with compound
interest at 12% per annum, it seems quite different. The compound formula on
compound interest is taken from Engineering Economy by G.J. Thuesen and W.J.
Fabrycky [62].
F = A [(1 + = Equal payment series with compounded amount. A = Capital amount. 1 = One percent %. = Interest at 12% p.a.. n = Time factor (7 and 10 years) [62].
10.1 EQUAL PAYMENT SERIES WITH COMPOUND AMOUNT ON POWER FACTOR CORRECTION AFTER PAYBACK ON REMAINING 7 YEARS OF LIFE-CYCLE
R) F = A[(1+i)n -1]/i = 14844 [(1 + 0.12)7 — 1] / 0.12 = 149 761.29 Rand
Page 74 10.2 EQUAL PAYMENT SERIES WITH COMPOUND AMOUNT ON LOAD MANAGEMENT AFTER TIME-OF-USE IMPLEMENTATION OVER A 10 YEAR LIFE-CYCLE PERIOD
S) F = A[(1 + i)° — 1] / i = 22158 [(1 + 0.12) 1° — 1] / 0.12 = 388 844.87 Rand
10.3 GRAND TOTAL COMPOUND AMOUNT ON CAPITAL SAVING WITH EQUAL PAYMENT SERIES
T = R + S = R149 761.29 + R388 844.87 = R538 606.16
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