The Economics of Power Factor Improvement

Abstract: Power factor (PF) is defined as the ratio of active power to apparent power, so the mount of the active power from the total apparent power depends on power factor. Electricity companies exerting big efforts to explore ways to reduce costs, and one area that is drawing interest is power factor improvement (PFI). This paper discusses the saving in money due to PFI for the consumers and the economical advantages for the electricity companies, as well as the factors affecting this, such as PFI methods, harmonics and billing practices of the electrical utility. Kassala distribution net-work is taken as case study. The saving in money and economical effect of PFI are determined. The results show the big saving in money and other economical benefits due to PCI.

Keywords: power factor, reactive power, capacitor, harmonics, electricity billing