Chapter 2 - 2

BEEI
3433
ENERGY EFFICIENCY
Chapter 2
The Cost of
Electricity
(Part 2)
BEEI 3433 Energy Efficiency 1
Learning Outcomes
At the end of this lecture, student should be able to:
 Explain the operation of demand controller
 Define the large power customer (LPC)
 Analyze the power factor correction
 Calculate the electricity bill for commercial and
industrial consumers
 Explain the importance of power factor
management
 Explain the operation of watt-hours meter

Demand Controller
 For industrial and commercial consumers the
maximum demand plays an important role in
overall electricity bill.
 Substantial savings can be made by keeping
the maximum demand as low as possible.
 Thus, an alarm can be installed to sound a
warning whenever the demand is about to
exceed a pre-established maximum.
 Loads that are not absolutely essential can then
be temporary switched off until the peak has
passed.

Demand Controllers
 This procedure can be

carried out automatically
by a demand controller
that connects and
disconnects individual
loads so as to stay within
the prescribe maximum
demand.
 Such a device can easily
save thousands of
Ringgits per year for a
medium power customer.

Demand Controllers

Demand Charges

Metering methodology for Large Power
Consumer (LPC)
 Definition of Large Power Consumer:
 TNB Commercial Circular No.91 stated that a
large power consumer is one who is supplied via
CT metering and includes domestic, commercial,
industrial and mining customers taking LV, MV
and HV.
 LPC Billing components:
 kWh unit consumption
 kW maximum demand charges and satisfying
initial MD declaration
 kvarh units for calculation of the monthly average
Power Factor
Power Factor Surcharge
 Power factor is the ratio of the active power P to the

apparent power S.
Power Factor = P/S = cos 
where θ is the angle between V & I

 Essentially, power factor is a measurement of how
effectively electrical power is being used.
 In an electric power system, a load with low power factor
draws more current than a load with a high power factor,
for the same amount of useful power transferred.
 The higher currents increase the energy lost (I2R) in the
distribution system, and require larger wires and other
equipment
 Many ac machines like induction motors and

transformers, absorb reactive power to produce
their magnetic fields.
 The power factor of these machines is low.
 A low power factor increases the cost of electrical

energy supply

Consider 2 factories X and Y that consume the same amount
of energy (kWh) and have the same maximum demand (kW).
However, power factor of X is unity while that of Y is 50%.

 Apparent drawn by factory X:
S = 1000kVA
 Apparent power drawn by factory Y
S = 2000kVA
 Because the line current is proportional to apparent
power (S = VI), factory Y draws twice as much
current as factory X.
 The line conductors, transformers, circuit breakers,
disconnect switches, and other devices supplying
energy to Y must have twice the rating of those
supplying X.

 The utility company must invest more capital to

service factory Y; consequently it is logical that it
should pay more for its energy, even though it
consumes the same amount.
 In practice, the rate structure is designed to
automatically increase the billing whenever the
power factor is low.
 Most electrical utilities require that the power factor
of their industrial clients be ≥ 0.90, in order not to
be surcharge. TNB requires medium voltage
customer PF ≥0.85

 When PF is too low, it is usually to the customer’s
advantage to improve it, rather than pay the higher
monthly bill.
 This is usually done by installing capacitors at the
service entrance to the plant, on the load side of the
metering equipment.
 This capacitors may supply part, or all, of the
reactive power required by the plant.
 Industrial capacitors for power factor correction are
made in single-phase and 3-phase units rated from
5kVAr to 200kVAr.

 TNB imposes on all commercial, industrial & LPC to
maintain their power factor to no less than 0.90
(electricity supply 132kV and above) or less than
0.85 (electricity supply below 132 kV).
 Failing to maintain the required PF will result on a
SURCHARGE being imposed on them.
 The surcharge is incorporated into the TARIFF
structure.
 For all TARIFFs except A and G, the consumers shall
use their best endeavors to obtain highest possible
PF in the operation of any of their electrical
installations.

(1) Below 0.85 and up to 0.75 (0.85>PF≥0.75) lagging,

a supplementary charge of 1.5% of the bill for that
month for each 0.01 unit below 0.85 and up to 0.75
lagging PF will be added to the bill for that month,
and
(2) Below 0.75 (0.75>PF) lagging, in addition to the
charge payable under (1) above, a supplementary
charge of 3% of the bill for that month for each
0.01 unit below 0.75 lagging PF will be added to the
bill for that month.

Example
A LPC has a monthly PF at 0.6 lagging, and its

monthly consumption (electricity bill) is
RM480,000.00.
What will be its monthly PF Surcharge?

Solution
Based on the tariff,
Power Factor Surchage
– (1) 0.85 -0.75 = 1.5% x 10 units lagging
= 15%
– (2) 0.75- 0.60 = 3% x 15 units lagging
= 45%
– Total surcharge levied = 60%
– Surcharge = 60% x RM480000 = RM288,000

– Total monthly bill = RM480,000 + RM288,000
= RM768,000

Example
A LPC has a monthly PF at 0.6 lagging, and its

monthly electricity bill is RM480,000.00.
What will be its monthly energy consumption

bill and PF Surcharge?

Power Factor Correction
 Power factor correction is economically feasible
whenever the decrease in the annual cost of
electricity exceeds the amortized cost of installing
the required capacitors.
 In some cases the customer has no choice but
must comply with the minimum power factor
specified by the utility company.
 The power factor may be improved by installing
capacitors at the service entrance to the factory or
commercial enterprise.
 It may be desirable to correct the power factor of
an individual device, or machine, if its power factor
is particularly low.
Power Factor Correction
How????
P
old P
new
,
Qold Qnew
+ QC
Sold Snew

Example
A factory draws an apparent power of 300kVA
at a power factor of 65% (lagging). Calculate
the kvar of the capacitor bank that must be
installed at the service entrance to bring the
overall power factor to:
a) Unity (PF = 1)
b) 85% lagging

Solution
a) Unity power factor
Apparent power absorbed by the plant is
S = 300kVA PF = 65% = 0.65
 = cos-10.65 = 49.5o
Active power absorbed by the plant is
P = S cos  = 300 x 0.65 = 195 kW
Reactive power absorbed by the factory is
Q = S sin  = 300 sin 49.5o = 228 kvar
To raise the power factor to unity, we have to supply all
the reactive power absorbed by the load (228kvar).
The three-phase capacitors is rating 228kvar.

Solution
b) 85% lagging
PF = 85% = 0.85  = cos-10.85 = 31.78˚
The new reactive power supplied by the line is
Qnew = P Tan  = 195 Tan 31.78˚ =121kvar
Because the load still draws 228kvar but the line now
supply only 121kvar, the difference must come from
the capacitor.
The rating of this capacitor is
Qcap = 228 – 121 = 107kvar

Solution
The demand of commercial and industrial
customers varies greatly throughout the day.
As a result, it is common practice install a
variable capacitor unit at the service entrance.
In the case of large

customers, an
automatic controller
switches capacitor units
in and out so that the
power factor always lies
slightly above 95%.

Example
 A 600kW induction furnace connected to an 800V single-
phase line operates at a power factor of 0.6 lagging. It is
supplied by a 4kV line and a step-down transformer, shown
in figure below
a) Calculate the current in the 4kV line.
b) If a 500kvar capacitor is installed on the HV side of the
transformer, calculate the new power factor and the
new line current.

Solution
 This is an interesting example where individual power factor
correction must be applied. The reason is that the induction
furnace is a single-phase device whereas the plant is
certainly energized by a 3-phase line.
 We cannot correct the power factor of single-phase
equipment by adding balanced 3-phase capacitors at the
service entrance.
 a) Active power absorbed by the furnace is
P = 600kW
Apparent power absorbed by the furnace is
S = P / cos  = 600 / 0.6 = 1000kVA
Current in the 4kV line is
I = S / V = 1000kVA / 4kV = 250A

Solution
b) Reactive power absorbed by the furnace is
Q = √(S2 –P2)= √(10002 –6002) = 800kvar
Reactive power supplied by the capacitor is
Qc = 500 kvar
Reactive power that the line must supply is
QL = Q – Qc = 800 - 500 = 300kvar
Active power drawn from the line is
PL = 600kW
Apparent power drawn from the line is
SL = √PL2 + QL2 = √(6002 + 3002) = 671kVA

Solution
New power factor of the line is
Cos  = PL/SL = 600 / 671 = 0.89
The new line current is

I = SL/V = 671000/4000 = 168A
By installing the single-phase capacitor bank,

the line current drops from 250A to 168A,
which represents decrease of 33%.

Summary
 Its follows that the wire I2R loss and voltage
drop on the supply line will be greatly
reduced.
 Furthermore, the power factor rises from
60% to 89% which will significantly reduce
the monthly electricity bill.
 Finally, the 3-phase line currents are more
likely to be reasonably balanced at the
service entrance despite the presence of this
large single-phase load.

Example
A paper mill consumes 28 million kilowatt‐hours of energy
per month at power factor of 83%. The demand meter
registers a peak demand of 43MW. Calculate the monthly bill
using the large power rate schedule given as follows:
TARIFF CATEGORY UNIT RATES
2. Tariff E1 - Medium Voltage General Industrial Tariff

For each kilowatt of maximum demand per month RM/kW 25.3
For all kWh sen/kWh 28.8
The minimum monthly charge is RM600.00

Solution
Usage:
28,000,000 x RM 0.288 = RM 8,064,000.00
Maximum demand:
43,000 x RM 25.3 = RM 1,087,900.00
Power Factor Surcharge:

Power Factor = 0.83
(a) 0.85 -0.83 => 1.5% x 2 = 3.0%
Penalty = 3.0% x RM 8,064,000.00= RM 241,920.00
Total Bill : RM 8,064,000.00 + RM 1,087,900.00 +

RM 241,920.00
= RM 9,393,820.00
Example
Billing for LPC
A small industry operating day and night, 7 days a week,

consumes 600,000kWh and 800,000kvarh per month. The
maximum demand is 1.2MW. Calculate the electricity bill
using the tariff given as follows:


Solution
Usage:
600,000 x RM 0.288 = RM 172,800.00
Maximum demand:
1,200 x RM 25.3 = RM 30,360.00
Power Factor:
Power Factor = P / S
= (600,000) / √[(600,000)2+(800,000)2]
= 0.6

Solution
Power Factor Surcharge:
Power Factor = 0.6
(a) 0.85 -0.75 => 1.5% x 10 = 15.0%
(b) 0.75 -0.60 => 3.0% x 15 = 45.0%
 Surcharge = 60.0% x RM 172,800.00

= RM 103,200.00
Total Bill : RM 172,800 + RM 30,360.00 +

RM 103,200
= RM 306,360.00

Example
Billing for LPC ( Continue )
A small industry operating day and night, 7 days a week

for 30 days consumes 600,000kWh and 800,000kvarh per
month. The maximum demand is 1.2MW. Determine the
size of capacitor bank in kvar that must be installed to
bring PF to 0.9 ( Lagging ).


Solution – Please Try !
Answers ?

Importance of PF Management
The need to control the reactive power consumption
– Impact on power utility company
• Higher capital cost
• Higher power purchase from IPP
• Higher line losses
• Wasted fuel
• Lower profit
– Why power utility support PFC?
• Sharply reduce the demand for reactive power
• Reduce supply losses
• Improve voltage regulation
• Increase capacity without further investment in
generation or distribution
Importance of power factor
management
Benefits to customers
– 1% to 6% reduction in demand and energy
consumption from power factor management
program
– Reduce the electricity bill
– Stabilize incoming line voltage
– Reduce internal line loss and heat buildup (I2R)
– Increase the operating life of motors
– Increase the available capacity of incoming supply
lines and transformers

Understand and Minimising Energy Bill
Example : UTeM Electricity Bill October 2017

Measuring electrical energy
 Power utilities use the energy meter to measure the
energy supplied to industry and private homes.
 Electric meters are typically calibrated in billing units,
the most common one being the kilowatt hour
 One kilowatt-hour (kWh) is exactly equal to 3.6MJ
(1Vx1Ax1000x3600s)
 Meter which measure industrial and residential energy
are called watt-hour meters; they are designed to
multiply power by time.
 The electricity bill is usually based upon the number of
kilowatt hours consumed during one month.
 Watt-hour meters must be very precise. Induction and
digital watt hour meters are used for residential
metering, but now all new installation use digital meter

Electromechanical Meter Digital Meter

1 - Voltage coil - many turns of
fine wire encased in plastic,
connected in parallel with load.
2 - Current coil - three turns of
thick wire, connected in series
with load.
3 - Stator - concentrates and
confines magnetic field.
4 - Aluminum rotor disc.
5 - rotor brake magnets.
6 - spindle with worm gear.
7 - display dials - note that the
1/10, 10 and 1000 dials rotate
clockwise while the 1, 100 and
10000 dials rotate counterclockwise.
Electromechanical Meter


 The electromechanical induction meter operates by counting
the revolutions of an aluminum disc which is made to rotate at a
speed proportional to the power.
 The number of revolutions is thus proportional to the energy
usage. It consumes a small amount of power, typically around 2
watts.
 The metallic disc is acted upon by two coils. One coil is
connected in such a way that it produces a magnetic flux in
proportion to the voltage and the other produces a magnetic
flux in proportion to the current
 This produces eddy currents in the disc and the effect is such
that a force is exerted on the disc in proportion to the product of
the instantaneous current and voltage.

 A permanent magnet exerts an opposing force proportional to
the speed of rotation of the disc.
 The equilibrium between these two opposing forces results in
the disc rotating at a speed proportional to the power being
used.
 The disc drives a register mechanism which integrates the
speed of the disc over time by counting revolutions, much like
the odometer in a car, in order to render a measurement of the
total energy used over a period of time.
 The amount of energy represented by one revolution of the
disc is denoted by the symbol Kh which is given in units of
watt-hours per revolution.

 Kh value for TNB is 3.0 watt-hour (Wh). For 1kWh
consumption, the disc will rotates 333.3 times.
( E = Kh x number of turns )
 By using the value of Kh, one can also determine their power
consumption at any given time by timing the disc with a
stopwatch.
 If the time in seconds taken by the disc to complete one
revolution is t, then the average power absorbed in watts is
3600  Kh
P
t
 For 1000 watts of load, one revolution took place in 10.8
seconds.
 This method can be used to determine the power consumption
of household devices by switching them on one by one.
Example
If the disc makes turns in 5 seconds, calculate the

energy consumed by the load in 10 minutes and the
average power of the load.

Solution
Each turn corresponds to an energy consumption of
Kh = 3.0Wh.
Energy consumed during the 10 minutes interval is

E = Kh x number of turns
Number of turns in 10 min = 10 x 60s / 5s = 120 turns
 E = 3.0 Wh x 120 = 360 Wh
Average power absorbed by the load during this interval is

P = (3600 x 3.0) / 5
= 2160 W
Electronic Meter
 Electronic meters display the energy used on an LCD
or LED display, and can also transmit readings to
remote places.
 Electronic meters can also record other parameters of
the load and supply such as maximum demand, power
factor and reactive power used.
 Can also record the amount of energy used during
Peak and Off-peak hours.
 Accurately (+/- 1.0%) record the amount of energy
used

Electronic Meter

Electronic Meter
 Electronic meters has a power supply, a metering
engine, a processing and communication engine (i.e. a
microcontroller & DSP), and other add-on modules
such as RTC, LCD display, communication
ports/modules and so on
 The metering engine is given the voltage and current
inputs and has a voltage reference, samplers and
quantisers followed by an ADC section to yield the
digitised equivalents of all the inputs.
 These inputs are then processed using a Digital
Signal Processor to calculate the various metering
parameters such as powers, energies etc.

Electronic Meter – Single Phase
 For power consumption monitoring, electronic meters
contain a pulsing visible red LED.
 One pulse corresponds to 1 watt-hour (Wh) ( Kh = 1.0
Wh). For 1kWh consumption, the LED will pulse 1000
times.
Kh = 1.0 Wh

Example
If the watt hour meter LED makes one pulse in 5

seconds, calculate the energy consumed by the load
in 10 minutes and the average power of the load.

Solution
Each pulse corresponds to an energy consumption of
Kh = 1.0Wh.
E = Kh x number of pulse
Number of pulse in 10 min = 10 x 60s / 5s = 120 pulses
 E = 1.0 Wh x 120 = 120 Wh
P = (3600 x 1.0) / 5 = 720 W

Electronic Meter – Three Phase
 For power consumption monitoring, electronic meters contain
a pulsing visible red LED.
 200 pulses corresponds to 1 kWh
  Kh = 1000 / 200 = 5.0 Wh
Pulse LED
200 imp/kWh

Example
If the 3-phase watt hour meter LED makes 5 pulses in
10 seconds, calculate the energy consumed by the
load in 10 minutes and the average power of the load.

Solution
Each pulse corresponds to an energy consumption of
Kh = 5.0Wh.
Time taken for each pulse is 10s / 5 = 2s

E = Kh x number of pulse
Number of pulse in 10 min = 10 x 60s / 2s = 300 pulses

 E = 5.0 Wh x 300 = 1500 Wh

P = (3600 x 5.0) / 2 = 9000 W


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BEEI

BEEI 3433 Energy Efficiency 2

BEEI 3433 Energy Efficiency 3

 This procedure can be

BEEI 3433 Energy Efficiency 4

BEEI 3433 Energy Efficiency 5

BEEI 3433 Energy Efficiency 6

 Power factor is the ratio of the active power P to the

Power Factor = P/S = cos 

where θ is the angle between V & I

 Many ac machines like induction motors and

 The power factor of these machines is low.

 A low power factor increases the cost of electrical

BEEI 3433 Energy Efficiency 9

BEEI 3433 Energy Efficiency 10

BEEI 3433 Energy Efficiency 11

 The utility company must invest more capital to

BEEI 3433 Energy Efficiency 12

BEEI 3433 Energy Efficiency 13

BEEI 3433 Energy Efficiency 14

(1) Below 0.85 and up to 0.75 (0.85>PF≥0.75) lagging,

BEEI 3433 Energy Efficiency 15

A LPC has a monthly PF at 0.6 lagging, and its

What will be its monthly PF Surcharge?

BEEI 3433 Energy Efficiency 16

– Surcharge = 60% x RM480000 = RM288,000

BEEI 3433 Energy Efficiency 17

A LPC has a monthly PF at 0.6 lagging, and its

What will be its monthly energy consumption

BEEI 3433 Energy Efficiency 18

BEEI 3433 Energy Efficiency 20

BEEI 3433 Energy Efficiency 21

The three-phase capacitors is rating 228kvar.

BEEI 3433 Energy Efficiency 22

BEEI 3433 Energy Efficiency 23

In the case of large

BEEI 3433 Energy Efficiency 24

BEEI 3433 Energy Efficiency 25

BEEI 3433 Energy Efficiency 26

BEEI 3433 Energy Efficiency 27

The new line current is

By installing the single-phase capacitor bank,

BEEI 3433 Energy Efficiency 28

BEEI 3433 Energy Efficiency 29

TARIFF CATEGORY UNIT RATES

2. Tariff E1 - Medium Voltage General Industrial Tariff

BEEI 3433 Energy Efficiency 30

Power Factor Surcharge:

Total Bill : RM 8,064,000.00 + RM 1,087,900.00 +

A small industry operating day and night, 7 days a week,

TARIFF CATEGORY UNIT RATES

2. Tariff E1 - Medium Voltage General Industrial Tariff

BEEI 3433 Energy Efficiency 32

BEEI 3433 Energy Efficiency 33

 Surcharge = 60.0% x RM 172,800.00

Total Bill : RM 172,800 + RM 30,360.00 +

BEEI 3433 Energy Efficiency 34

A small industry operating day and night, 7 days a week

2. Tariff E1 - Medium Voltage General Industrial Tariff