The ROI of Power Factor Correction

and loss of torque at the cutting A comparative analysis of power What is power factor? face. The consequence can be factor correction with upgrading or costly damage or a reduced life installing new equipment. Power factor is a measure of expectancy to electrical distribution Present issues surrounding how efficiently electrical power and production equipment as well escalating production costs, energy is being consumed on site. The as possible loss of production efficiency and a growing trend way a business manages their through downtime. power and electrical infrastructure of electricity supply companies A system with poor power factor is therefore incredibly important, introducing kVA- based maximum draws more apparent power from as poor power factor can have a demand charges are driving mining the network and as a result the number of financial or operational companies to re-think how they supply network needs to provide implications. optimise their electricity supply and infrastructure and generation that distribution infrastructure. While a power factor of 1 (or will support this. To reduce the Often located at the end of the grid unity) is ideal, in most cases it demands placed on the grid, end and characterised by heavy start is not economically viable as users are subjected to a demand up loads, mine sites are particularly compensation is not a linear charge (based on kVA) as an susceptible to power quality issues. function. Though largely dependent incentive to improve their power These issues can result in negative on connection agreements, it is factor to reduce the apparent power technical and financial impacts by widely accepted that a power factor the site draws from the network. of 0.95 or higher is considered to interrupting production and driving The application of power factor be an efficient use of power, while up operational costs. It can also correction (PFC) systems power factor lower than 0.9 risks restrict plans for mine expansion. compensate for some of the breaching agreements and can problems associated with Mines, considered very large energy lead to higher than necessary kVA the dynamic loads that are users, are also being targeted by demands and subsequent higher characteristic of mining networks. electricity supply companies to electricity bill charges. address their power quality (in A PFC system will monitor and particular power factor) issues to In the mining sector, power factor is regulate a site’s power factor by meet electricity supply standards affected particularly by the electric energising optimally sized and and their electricity supply motors in longwalls, conveyors, designed steps that will connection agreement conditions. ventilation fans, preparation locally supply the required reactive plants etc., all of which use large power to the connected loads, thus Power quality equipment and amounts of energy and require reducing the power drawn from the solutions are increasingly being large amounts of reactive power to supply source. considered to alleviate technical support the network. problems associated with poor power quality, reduce kVA demand If a mine’s electrical system is charges and avoid capital outlay not optimised for these types of when looking to increase capacity. loads, power factor is likely to be negatively affected. Poor power factor affects a mine’s operating efficiency and operating costs in several ways. Electrical losses and instability in the system may be amplified, resulting in or switchboards overheating, motor start issues

1 White Paper The ROI of Power Factor Correction

„ Mitigation of network and At present the mine is experiencing Benefits of installing technical problems motor start issues with their ventilation fans and loaded Power factor correction Provide voltage stability and conveyers. as a result reduce or eliminate systems The mine is planning on expanding issues associated with voltage their current operations to fluctuation that may cause There are a number of positive accommodate an additional difficulty with large motor start, benefits associated with installing continuous miner and increased low torque issues for cutting PFC equipment and solutions, as production. To achieve this they machines due to lower than outlined below. have determined they will need to: desired voltage levels and „ Tariff savings (avoiding starting fully loaded conveyer „ Install new, larger capacity penalties) systems. In addition, a PFC cable for several kilometres system can be designed to filter underground to allow for an Reduces costs where tariffs harmful harmonic distortions increased electrical demand are related to KVA maximum which can cause premature „ Upgrade the 66/11kV demand, with poor power failure of electrical equipment, factor, you will pay more for nuisance tripping, breaching your electricity supply as you of connection agreements „ Upgrade the existing 11kV/415V are subject to KVA maximum or impact the validity of Ex transformer (although this won’t demand charges. These charges certifications of flameproof fix the motor start issues) can often be a large percentage motors. of an electricity bill, with some The mine investigated two options as high as 25% of a total to achieve increased energy supply electricity bill. Scenario and mitigate the operational problems. „ Capital avoidance The following scenario is

appropriate to mining operations Option A: Capital expenditure - Reduce the loading of supply that are considered very large installing new/ upgrading existing transformers, switchboards and energy users by their electricity cables and as a result release equipment supply network company. capacity in your electrical To cater for additional electrical infrastructure and plant without An underground thermal coal capacity, the following installations/ expanding supply infrastructure, mine in Queensland currently has upgrades are required: thereby avoiding or deferring a power factor of 0.8. The mine „ Increase transformer capacity capital outlay on upgrading or is a 66kV metered customer with at the 66/11kV transformer by purchasing new equipment to billing partially calculated on kVA installing cooling fans increase your electrical capacity. maximum demand and capacity charges with an Authorised „ Replace the existing 11kV/415V Demand structure. The existing transformer with one of larger infrastructure features a 66kV capacity to support an additional /11kV transformer with 11kV vent fan switchyard, currently distributing „ Upgrade cable size underground to the underground mine as well to support the electrical load as surface operations. One 11kV from an extra continuous miner circuit supports an 11KV/415V transformer with several ventilation An initial estimate of these total fans. Another 11kV circuit supplies upgrades would require over the underground, including $600,000 in capital expenditure. continuous miners. There are no electricity bill savings from this project/option.

2 White Paper The ROI of Power Factor Correction

It is noted that Option A does not mitigate the existing operational Business case problems with starting certain motors and concerns about less comparison than desirable torque for the cutters The decision as to which project at the face. to proceed with is obvious by comparison: Option B: Installing power factor correction Option A has a Capital cost of $600,000, but no reduction in The installation of the following two Electricity Network charges. PFC systems will yield the same increase (more in fact) in energy Option B has a Capital cost of supply capacity as the installations/ $650,000 and a reduction in upgrades outlined in Option A, as Electricity Network Charges of well as mitigating the motor start $180,000 per year. issues currently being experienced. However, Option B is also delivering „ Install a low voltage PFC the capacity increase provided by system on the 415V side of Option A. A comparison of the two the transformer ventilation projects shows that the incremental substation capital for Option B is $50,000 more than for Option A. This means „ Install a medium voltage (11KV) Option B’s incremental investment PFC system in the underground has a Return on Investment of 360% drift or 0.33 year simple payback as this An initial estimate of these systems option is also delivering a reduction would require $650,000 in capital in electricity charges of $180,000 expenditure. per year. This project will mitigate the mine’s Captech can provide assistance motor start issues, as well as and advice on any aspect of power delivering a reduction in electricity quality requirements, including Network Demand and Capacity power factor correction, kVA charges of $180,000 per year demand minimisation, voltage based on the client’s existing tariff disturbance, harmonic filtering structure. and voltage control analysis and solutions.

3 White Paper