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Power Quality

The hidden cost of poor power quality

October 31, 2003
by Hans De Keulenaer, European Copper Institute
email hdk@eurocopper.org

Introduction

A glass factory in France loses e600 000 and 3 days of production due to the consecutive
failure of two transformers. In a bank, a fire, resulting from neutral overheating, causes
over e1 million damage. These are not isolated events. Recent publications [1, 2] lead to
a global bill for poor power quality of 500 billion euro per year, i.e. 50% of the turnover of
the global electricity sector. For many business uses, the cost of poor PQ is higher than
the electricity bill.
And the cost is rising. It is caused by outages, dips, harmonics and other types of disturbances. Some disturbances are relatively new, such as harmonic currents and voltages.
Others, like outages and dips have always been around, but the cost impact of these events
is increasing dramatically. The cost of a single disturbance in a semiconductor facility
can be as high as 3.8 million euro. Loss of power in a telecommunications facility costs
e30 000 per minute [3].
The results are lost production, equipment damage, idling personnel, data loss, as well as
consequential losses: revenue postponed, negative impact on cash-flow, loss of goodwill
from customers, possibly even loss of market share. Sometimes, the effects are not so
obvious, as in the case of harmonics causing extra, hidden losses in the system, and
accelerated equipment ageing caused by the additional heat due to the harmonics.
This article offers some elements to answer the questions:
is poor PQ really a problem?
how bad is it?
what is the risk of being exposed?
how to guide investment decisions in PQ solutions?

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Power Quality

What is poor PQ?

A perfect power supply would be one that is always available, always within voltage and
frequency tolerances and has a pure noise-free sinusoidal wave shape [1]. This should be
placed in the context of sensitivity of loads to various kinds of disturbances. The cost of
power quality is determined by:
the quality of the voltage supplied
the types of load in the installation item the sensitivity of these loads to PQ disturbances
The cost of a kWh not supplied because of an outage is much higher than the cost of a
kWh that is supplied when needed [1]. One has to bridge the gap between the number of
nines of reliability of the supply, typically around 3-4 nines, and the 6 nines required in
todays digital society. Four nines means a power supply that is available 99.99% of the
time, equivalent to 52 minutes of outages per year, whereas 6 nines allows for merely 30
seconds of outage per year.
However, the nines of reliability do not tell the full story. A single outage of 52 minutes
is much less damaging than 52 (unplanned) outages of 1 minute. Sometimes, outages of
less than a minute are not even counted in the statistics. According to [4], the average
site experiences 16 outages per year. Outages constitute about 6% of total power quality
disturbances, but a much higher portion of the cost of poor power quality.
Voltage disturbances occur frequently in the grid, as well as on-site. Monitoring solutions
are becoming more necessary, and at the same time more affordable. A study to monitor
over 100 sites for a year reports an average of 289 disturbances per site, i.e. over 1 event
per working day, but with a large variation. Some sites have zero disturbances, while on
the other extreme, sites experience over 14 000 events per year [4].
The quality of electrical service should be considered as a decision criterion for plant
location. The availability and quality of power differs considerably between regions. Poor
power quality can dramatically increase the cost of doing business, either through investing
in solutions for mitigation, or through adaptation to poor power quality. In rural areas,
supplied by long overhead lines, there is often little possibility for improving power quality
from the supply side.
Harmonics have been around for a while, but today, are becoming omnipresent, due to
the prevalence of power electronics in computer power supplies, energy saving lamps and
motor driven systems with variable speed control. Harmonics in the distribution system
result in additional costs:
premature equipment failure, e.g. PFC equipment due to unexpected resonance
phenomena, or transformer failure.

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Power Quality

additional heat losses in transformers, cables, motors

derating of equipment, resulting in higher equipment cost
This requires a characterisation of the harmonic culture in a building, and an impact
assessment of this harmonic culture on the electrical equipment. Except for some basic
fundamental work, the cost impact of harmonics is not yet well understood, but a recent
Eurelectric report estimates it at several 100 billions of euros per year globally [2].

Why is power quality such an issue today?

Equipment on-site is becoming more sensitive to disturbances that it often self generates. The quality of power supply does not increase - in fact, it would be uneconomical
to improve power quality at the supply level to the requirements of the digital society.
Fortunately, a wide range of solutions is available to tackle problems on-site.
The disturbances generated by electronic equipment, and its sensitivity to disturbances, is
a factor that should be included in equipment specifications, and entered into commercial
discussions. For example, a low quality switched-mode power supply (SMPS) for personal
computers may necessitate an investment in the electrical installation, in terms of filters,
neutral upsizing or dedicated circuits. This investment in mitigation needs to be compared
against the cost of upgrading all SMPS-units.

Which problems occur?

A survey conducted by European Copper Institute in 2001 asked facility and building
managers at 1 400 sites in 8 countries about the PQ problems they experience [5]. It
showed that any of the problems listed in figure 1 is experienced by 5 25% of sites. The
real incidence rate may be higher, for lack of awareness of the problem, or being unable
to diagnose it as a PQ problem.

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Power Quality

% occurence
Computer lockups
Flicker
Equipment damage (at partial load)
Data processing equipment
PFC overloading
Problems when switching heavy loads
Overheated neutral
Problems with long lines
Nuisance tripping
Utility metering claims
0%

5%

10%

15%

20%

25%

30%

Figure 1: Incidence rate for typical power quality problems

These problems occur in all sectors of business, and are a constant nuisance. According
to [6], PQ problems happen at least monthly for two thirds of sites, and even weekly for
one third of sites in Spain.

What solutions exist

Solutions can be applied at 4 levels (Figure 2 from [7]):

1. Work on the equipment specification: the most expensive solution when applied
site-wide, but cost-effective in specific cases.
2. Protect the equipment at sub-panel level. This decentralised approach can be applied for controls but also UPS, filtering. This is a trade-off between costs, selection
and flexibility.
3. Site wide protection & mitigation strategy.
4. Solutions in the grid.
The question remains who will pay for mitigation of the PQ problems. The principle
of polluter pays can be difficult to apply since different utilities may be involved. Even
if the disturbance is coming from the grid, it still may be the users responsibility to
pay for mitigation. The current thinking evolves towards a base-level of power quality
supplied by the utility, as described in EN 50160. This level of power quality is included

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Power Quality

in the electricity tariff, but does not suffice for many processes. Premium power quality
can be achieved, either to solutions on-site, or through an agreement with the utility.
However, premium power quality supply contracts seem to have had limited success.
Solving problems on-site is the mainstream mitigation strategy [8]. Figure 3 gives an
overview of the most popular PQ solutions.

1.
2.
3.
4.

controls

Equipment specification
Controls protection
Overall protection inside plant
Utility solutions

motors

utility source

Sensitive process machines

Figure 2: Levels of protection for PQ mitigation

% adoption
Surge protection
UPS
T-rms metering
Equipment derating
Dedicated circuits
Total rewire
Meshed earth
Passive filters
Active conditioner
TN-S rewiring
upsized neutral
0%

10%

20%

30%

40%

50%

60%

70%

Figure 3: Most popular solutions adopted on-site, based on above mentioned survey [5]

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Power Quality

How to evaluate investment in PQ solutions?

For mitigation against singular events (outage & dips), a methodology is proposed in [7]
which is evolving into a best practice approach for such analysis:
characterise power quality in terms of type of event, location & frequency of occurrence
categorise events into types
estimate the cost impact of each type
calculate the cost of poor power quality per year, as the base case.
Next, for various mitigation measures, estimate the impact in terms of immunity against
each type of event, or reduced cost impact when the event occurs. This results in a cost
of poor PQ in the presence of each mitigation measure.
Adding the annualised cost of the investment to the annual cost of poor PQ yields the
type of graph in Fig 4. This allows to make a decision, taking into account various soft
benefits of good power quality:
increased continuity of operation
risk reduction: the damage due to sags is a statistical parameter, with a maximum
value much higher than its average.
better staff well-being for operating in a functional rather than dysfunctional environment
$500.000
Solution cost
Damage due to sags

$400.000
$300.000
$200.000
$100.000
$0
base case - no
changes

Primary static
switch

Service entrance Protect machine Combined static

energy storage (2 controls and
switch with
MVA)
winders
controls
protection

Figure 4: Annual cost of poor power quality + mitigation for a plastics extrusion facility

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Power Quality

Conclusion

The cost of poor PQ is high and rising.

Poor PQ is a problem for a wide number of business sectors
A large proportion of sites suffer from some degree of poor PQ (over 50%)
The problems are occurring frequently, at least monthly, and often weekly.
Knowing the cost of poor PQ starts with monitoring. Advanced monitoring solutions are
available. Linking PQ events to costs can be done, and a judgement which mitigation
measures are needed.
Good power quality reduces risk, decreases the cost of doing business, and hence improves
a business bottom line. It also raises throughput, through reducing downtime. According
to a study on PQ mitigation in Spain [6], covering 100 companies, payback on mitigation
measures ranges between 7 months and 5 years, but is typically below 2 year.

References
[1] Task force 38.06.01. Methods to consider customer interruption costs in power system
analysis. Technical report, CIGRE, 2001.
[2] Power quality in european electricity supply networks 1st edition. Technical report,
Eurelectric, 2002.
[3] David Chapman. The cost of poor power quality. In Power Quality Application Guide
2-1. www.lpqi.org, April 2002.
[4] Douglas S Dorr. Point of utilization power quality study results. In IEEE IAS meeting,
1994.
[5] Hans De Keulenaer. Power quality self-assessment guide. In Power Quality Application
Guide 1-1. www.lpqi.org, November 2002.
[6] Jonathan Manson. Business model for investing in pq solutions.
[7] Mark McGranaghan. Economic evaluation of power quality. IEEE Power Engineering
Review, 2002.
[8] Leonardo power quality initiative literature survey. February 2002.

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