Cost Savings for PF Correction Equipment

[charlie b]

New facility comprising several buildings. 2500 amp, 480/277V service. Lots of motors. The specs called upon the contractor to provide automatic power factor correction to achieve a 0.97 pf at the service point. The contractor has asked that to be revised to 0.95, and the owner agreed.

An owner’s representative is wondering how much money this change could have saved the contractor, in preparation for possible negotiations over a credit.

Questions:

1. Is there a way to determine this?
2. Is it even reasonable for the owner to ask for a credit?

 

[Jraef]

The added cost to try to attain .97 vs .95 will never be offset by any perceived savings. Some PFC vendors try to make a bigger deal about "energy savings" from PFC correction, but it's overblown for marketing purposes in my opinion. The only real energy savings comes from a SLIGHTLY lower I²R heat loss in the transformers from not having to supply as much reactive current, but if the utility owns those transformers, they own the losses too so they don't show up on the end user's energy use portion of their bill.

The only appreciable savings they will realize is going to be in avoidance of any possible PF penalties assessed by the power utility, which is THEIR way of recouping those losses. Most utilities I have encountered that have a PF penalty will kick in at .95PF or lower. I'd hazard a guess that the contractor had contacted the PoCo and discovered this was the case, hence the request to use the lower value.

 

[Besoeker]

The added cost to try to attain .97 vs .95 will never be offset by any perceived savings. Some PFC vendors try to make a bigger deal about "energy savings" from PFC correction, but it's overblown for marketing purposes in my opinion. The only real energy savings comes from a SLIGHTLY lower I²R heat loss in the transformers from not having to supply as much reactive current, but if the utility owns those transformers, they own the losses too so they don't show up on the end user's energy use portion of their bill.

The only appreciable savings they will realize is going to be in avoidance of any possible PF penalties assessed by the power utility, which is THEIR way of recouping those losses. Most utilities I have encountered that have a PF penalty will kick in at .95PF or lower. I'd hazard a guess that the contractor had contacted the PoCo and discovered this was the case, hence the request to use the lower value.

There are cost savings from reduced conductor sized if the correction is done at the load end.

 

[Ingenieur]

New facility comprising several buildings. 2500 amp, 480/277V service. Lots of motors. The specs called upon the contractor to provide automatic power factor correction to achieve a 0.97 pf at the service point. The contractor has asked that to be revised to 0.95, and the owner agreed.

An owner’s representative is wondering how much money this change could have saved the contractor, in preparation for possible negotiations over a credit.

Questions:

1. Is there a way to determine this?
2. Is it even reasonable for the owner to ask for a credit?

likely little or no impact

 

[charlie b]

There are no PF penalties from the utility unless PF gets below 0.8. To be clear, I am not talking about energy savings. The owner's rep is wondering if, for example, the contractor would have had to pay $75,000 for PF correction equipment to get a .97 PF, but would only have to pay $50,000 for PF correction equipment to get a .95 PF. In that case, since the contractor is saving $25,000 of their own costs, the owner might want a share of that back.

 

[Ingenieur]

assume a base of pf 0.85 at 2000 A and the same MW load
S = 1.663 MVA, P = 1.436 MW, Q = 0.876 MVAr

0.95
S = 1.512 MVA, P = 1.436 MW, Q = 0.473 MVAr

0.97
S = 1.480 MVA, P = 1.436 MW, Q = 0.358 MVAr

to get to 0.95 takes 0.40 MVAr
to get to 0.97 takes 0.52
needs ~ 0.1 MVAr less

after looking at the numbers might be a small credit for less CAPs

imo 0.97 is too high, may cause over-voltage and transient issues
0.95 might be too much

find out where the pf penalty threshold is (if there even is one) and shoot for a few % above that, eg, 0.90 control to 0.92-0.93

http://www.galco.com/buy/ABB/C485G5...MI1OHOwsWw2wIVGrjACh3w9w01EAQYBSABEgJS7vD_BwE
50 kVAr ~$1200, assume in bulk without enclosure ~$1000
0.1 MVAr = 100 kVAr ~ $2000

 

[texie]

There are no PF penalties from the utility unless PF gets below 0.8. To be clear, I am not talking about energy savings. The owner's rep is wondering if, for example, the contractor would have had to pay $75,000 for PF correction equipment to get a .97 PF, but would only have to pay $50,000 for PF correction equipment to get a .95 PF. In that case, since the contractor is saving $25,000 of their own costs, the owner might want a share of that back.

I wondering why if the POCO only penalizes @.8 and below why are they trying to achieve .97? I would also question the wisdom of attempting to correct .9 or better as this can lead to other issues. If this is for IR losses in their own system I hope this correction is not installed wholly at the service.

 

[Sierrasparky]

There are no PF penalties from the utility unless PF gets below 0.8. To be clear, I am not talking about energy savings. The owner's rep is wondering if, for example, the contractor would have had to pay $75,000 for PF correction equipment to get a .97 PF, but would only have to pay $50,000 for PF correction equipment to get a .95 PF. In that case, since the contractor is saving $25,000 of their own costs, the owner might want a share of that back.

So What . If the owner agreed and there was no talk or consideration of cost then done deal , tell the owner to get over it. Of course the Contractor asked because it was going to make his life easier, maybe a cash savings or just less trouble. What ever it was it is too late now.

 

[charlie b]

Many thanks for the many good points. It seems to me that the possibility of getting a credit is not worth the cost of trying to do so. I have a meeting on this topic in 20 minutes, and I will be better prepared because of everyone's contributions.