The case is, We have a normal panel and emergency panel. The total load is fed by transformer and some part of total load is on emergency fed by Generator. WE have ATS panel in case of power failure to shift the load on Generator panel.
so we have two panels one normal panel and one generator panel feeding the emergency load.
We have placed a PFI plant on the normal panel only, not on panel connected to generator.
Do we need to place PFI on generator panel also.
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there isn't enough information here to say they are needed. if your best reason for installing them is "because they are on the utility side of the ATS", reevaluate why you think they are needed. stop and ask yourself
why you need power factor correction while on standby generator and think about what happens as the gen starts and load increases or decrease. is there a voltage regulation problem? excessive heating due to I squared R loss?
consideration must be given to the connection of capacitor banks to any generator because doing so can negatively impact the stability of the generator, specifically when the generator is lightly loaded. this can cause the generator to operate at a leading power factor or voltages to rise to potentially damaging levels. this will damage the diodes in the generator. of course, this can be mitigated with automatic control of the capacitor (switching capacitors in and out, as needed).
if you own the genset and are intent on installing PFCC's, it's best to speak to the manufacturer about what you are planning and most importantly
why you want to do it. If you have a particular capacitor bank in mind, send the tech specs so they can review and approve. they will review how the proposed injected reactive power interacts with the generator capability curve.
my guess is they aren't necessary under most circumstances, but you should make that determination for yourself.