PAYBACK CALCULATIONS FOR POWER FACTOR IMPROVEMENT at CHPP, Zambia.

A. Deduction in demand charges by improving power factor

System present demand ( kVA1 ) = 2500 kVA

System present power factor (Cos 1) = 0.7 Power factor (Cos ) = kW/kVA kW = kVA x Cos at present power factor kW = kVA 1 x Cos 1 = 2500 x 0.7 = 1750

We are improving the power factor from 0.7 to 0.95 by installing the capacitor banks at CHPP MCC Now system demand (kVA2) Power factor improvement (Cos2) Now at this power factor kW = kVA2 = 0.95 = kVA 2 x Cos 2 = kVA2 x 0.95 As at the same power required demands are different depending on the power factor kVA 1 x Cos 1 = kVA 2 x Cos 2 1500 = kVA 2 x 0.95 kVA 2 = 1750/0.95 = 1842 after improving the power factor required demand at the same power is 1842 kVA instead of 2500 kVA Therefore reduction in demand charges in energy bill due to reduction in maximum demand by improving power factor from 0.7 to 0.9 shall be Saving in demand charges per month = Rs. 100 x (2500 1842) = Rs. 1,84,200 per month Net reduction per annum = 1,84,200 x 12 = 22,10,400

B. Cost investment for installation of power factor improving equipment

There are two sets of 300 kVAr and one set of 250 kVAr capacitor banks for each MCC Cost of capacitor banks = Rs. 1000000 Switching and associated equipment and installation = Rs. 200000 Total cost = Rs. 1200000

C. Pay back calculation

Total cost of the capacitor banks Annual depreciation and interest @ 20% = 1200000 x 0.2 Net annual saving = Rs. 2210400 240000 Net monthly saving = Rs. 1970400 / 12 Therefore, payback period = 1200000 / 164200 = Rs. 1200000 = Rs. 240000 = Rs. 1970400 = Rs. 164200 = 7.3 months

This may be consider that as demand (kVA) got reduced by improving power factor, current on the system also reduced further, I2 R losses also reduced. So there is further reduction in energy bill by decreasing losses on the system Advantages of improving power factor: 1. Reduced system losses, and the losses in the cables, lines, and feeder circuits and hence lower sizes could be opted. 2. Improved system voltages, thus enable maintaining rated voltage to motors, pumps and other equipment. The voltage drop in supply conductors is a resistive loss, and wastes power heating the conductors. A 5% drop in voltage means that 5% of your power is wasted as heat before it even reaches the motor. Improving the power factor, especially at the motor terminals, can improve your efficiency by reducing the line current and the line losses. 3. Improved voltage regulation. 4. Increased system capacity, by release of kVA capacity of transformers and cables for the same kW , thus permitting additional loading without immediate augmentation.