Energy 186 (2019) 115818

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Energy
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Tariff for reactive energy consumption in household appliances

Ali Ahmad a, b, *, Syed Abdul Rahman Kashif b, Muhammad Asghar Saqib b, Arslan Ashraf a,
Umar Tabrez Shami b
a
University of Central Punjab, Lahore, Pakistan
b
University of Engineering and Technology, Lahore, Pakistan

a r t i c l e i n f o a b s t r a c t

Article history: The use of inefficient household appliances and their poor power quality results in energy wastage in
Received 18 October 2018 residential buildings. These appliances also force the power system to operate at low power factor which
Received in revised form results in an ineffective energy utilization. This paper reports the energy consumption pattern of mostly
10 July 2019
used household appliances individually and collectively over a year. Their power quality parameters are
Accepted 23 July 2019
Available online 24 July 2019
measured through experimentation to calculate the reactive energy consumed by household appliances.
This paper also proposes the reactive energy tariffs to enhance the awareness among domestic con-
sumers to make efficient use of household appliances. Currently the reactive power management is being
Keywords:
Household appliances
dealt for only the industrial consumer by imposing low power factor penalty. This research estimated
Energy consumption that Lahore Electric Supply Company (LESCO) can generate a revenue of almost 150 million US dollars in
Power quality one year from household consumers by applying three part tariff scheme on reactive energy. By
Tariffs improving the power factor it is estimated that an energy conservation of 1.1
109 kWh per annum is
also possible. Thus the proposed tariff for reactive energy encourages the domestic consumers to get
involved actively in energy conservation while enabling the energy utilities to transfer more active en-
ergy to consumers without the expansion of the distribution network.
© 2019 Elsevier Ltd. All rights reserved.

1. Introduction of energy efficient lightning system among the people to save a

significant amount of power and to improve the power quality. This
In Pakistan, energy utilized in residential buildings is a signifi- program will help to manage the demand-side by narrowing the
cant part of the total energy used in the country, i.e. 50.44% in 2016 gap between generation and demand, and it is expected to save
[1,2]. Therefore, government has faced severe energy crisis because 1000 MW of power by 2020 when all existing lightning system will
of transmission line losses, shortage of generation and lack of be replaced with energy efficient systems. Reference [3] presents a
policies to regulate the demand of active and reactive power. In last similar concept implemented in Europe that has resulted in 23%
decade, government has installed coal power plants and some saving of energy by encouraging people to use energy efficient
renewable resources to overcome the energy crisis and has planned devices in households. Reference [4] has reported the saving of 27%
the upgradation of transmission line network to reduce the losses. and 30% in commercial and domestic sector respectively by
Installation of coal power plant is under criticism being considered encouraging the use of energy efficient systems. The National En-
harmful to the environment at different forums in the country. The ergy Efficiency and Conservation Authority in Pakistan has taken an
policies are being revised which will encourage, harvesting more initiative to publicly educate the people, using the media about
energy utilizing the green energy resources, and upgradation of cost-saving achieved by energy efficient appliances. It has also set a
electricity tariff to reflect the dynamic behavior of the power base-line guidance, Minimum Energy Performance Standards
network. A program named “Prime Minister Energy Saver Program” (MEPS), essential to be adopted by the manufacturer of systems
has been initiated by the government which includes distribution available in market to improve the quality [5,6].
There is a tradeoff between efficiency and quality: reference [7]
reports that light emitting diodes (LEDs) and CFLs have high effi-
ciency and can be adopted to save energy while reference [8] states
* Corresponding author. 1-Khayaban-e-Jinnah Road, Johar Town, Lahore,
that LEDs and CFLs cause electrical pollution by distorting the
Pakistan.
E-mail address: a.ahmad@ucp.edu.pk (A. Ahmad). current in the system and total harmonic distortion has been

https://doi.org/10.1016/j.energy.2019.07.148
0360-5442/© 2019 Elsevier Ltd. All rights reserved.
2 A. Ahmad et al. / Energy 186 (2019) 115818

reported in the range of 30.94%e174.38%. Reference [9] reports that The initial point of research was the analysis of the existing
extensive usage of such devices caused low power factor, increased household appliances by considering their electrical characteristics
current in network and severe power quality issues resulting in as a means of reactive energy. These characteristic were obtained
high temperature operation of the network components and de- by loads energy consumption data of the selected users.
vices leading to reduced operating life of equipment. Reference Objective of this research article is to:
[10,11] suggests upgrading electricity tariff structure to address the
use of such equipment and creating awareness about the nature of  Review on the research and practical approaches to reactive
the load. Reference [12] suggest acquiring load characteristic in- energy tariffs (Section 2);
formation and consumption pattern using the smart meters to  Overview of economic growth and existing tariff structure in
upgrade the tariff structure. Reference [13] suggest incentive pro- Pakistan (Section 3);
grams to promote the use of energy-efficient devices. As per sur-  Methodology to construct the energy consumption pattern of
veys conducted in 2015, the distribution network in Pakistan is only each household appliance (Section 4);
72.5% efficient even after the penetration of energy efficient devices  Experimentation to measure parameters associated with linear
and that is because of poor ‘power’ quality of energy efficient de- and non-linear household loads to calculate actual reactive en-
vices [14]. Reference [15] suggests practicing the compliance with ergy consumed in each appliance (Section 4.1);
high standards of power quality of non-linear devices, by the  Critical analysis of appliances electrical parameters, their rela-
manufacturer of devices, to address the low efficiency problem of tion with reactive energy and proposed reactive energy tariff
distribution network. (Section 5);
As per regulations, National Electric Power Regulatory Authority  Conclusion and policy implications (Section 6)
(NEPRA) established in 1997, is responsible for issuing distribution
licenses, defining tariffs and practicing performance standards in
all distribution networks in Pakistan. At present the residential 2. Reactive tariff overview
tariff in Pakistan charges for active energy (kWh) and there is no
policy for reactive energy consumption which has resulted in low Reactive power market idea was proposed in the beginning of
power factor, use of inefficient devices, low power quality and high 21st century [25]. Currently reactive power tariffs are different in
energy losses through the devices causing reactive power flow. every country. The European Network of Transmission System
References [16e18] report that many countries like Germany, Operators (ENTSO-E) [26] shows 43 transmission operators. The
Austria, Philippines, Belgium, Singapore, USA, UK, Portugal, and data shows that only 12 EU countries (Austria, Bosnia and Herze-
Poland have adopted the reactive energy tariff to improve the ef- govina, Cyprus, the Czech Republic, Denmark, Great Britain, Greece,
ficiency of their distribution network. Reference [19e23] defines Hungary, Luxembourg, Netherlands, Slovakia and Sweden) do not
guidelines, technical solutions, required incentives and financial have any tariffs and regulations on reactive power supply and ab-
penalties which were adopted to address the problems of distri- sorption to power system. All other EU countries have tariffs or
bution tariffs. penalties for reactive energy for high voltage to medium voltage
Reactive energy management plays a very important role in network users. Some EU countries like Lithuania, FYROM, Northern
relation to both technical and economic aspects of a power system Ireland, Serbia, Slovenia and Estonia have reactive energy regula-
operation and require effective tariff to limit the use of reactive tions and penalties on household (low voltage) consumers for pre-
power. Reactive energy tariff can change the behavior of the elec- defined power factor (PF) < 0.95 [27]. The comparison of reactive
tricity market, which reduces the adverse effects of reactive power, energy tariffs in different EU countries including household con-
and improves the power quality and energy efficiency [17]. Reactive sumers is shown in Fig. 1.
power is an essential component of alternating current (AC) power Due to change in electric appliances in low voltage distribution
systems. It has physical meanings, since it is generated, transmitted, network, the reactive energy consumption trend is changed and
utilized and causes extra energy losses which are certainly linked author [27] recommends to regulate household customers. Reac-
with costs [24]. The standard IEC 62053-24 defines & recommends tive energy regulations, tariffs & management methods varies be-
the metering of reactive energy based on fundamental frequency of tween different countries depending on the type of reactive
voltage & current and in case of non-sinusoidal conditions, it in- (capacitive/inductive) power consumed [24]. Now a days, reactive
fluence up to 5th harmonics. The IEEE Std. 1459e2010 highlighted energy tariffs are used to penalize the end consumers and do not
that not only fundamental active and reactive power causes losses provide symbol of energy efficiency and system reliability. There-
but distorted and harmonic power also causes losses. fore, some user prefer to pay penalty rather than improving power
Due to number of reasons the reactive energy tariff needs factor. Different methods used to charge reactive energy billing are
consideration: shown in Table 1.
The aim of reactive power tariffs is to:
 To raise the awareness among domestic consumers to purchase
energy efficient appliance;  Encourage the domestic consumers to use highly efficient
 Development of smart meters which has measurement and household appliances.
monitoring in real time;  Achieve energy efficiency both on supply and demand side.
 Growing numbers of semiconductor based non-linear domestic  Consider the whole investment and maintenance costs used in
loads; generation, transmission and distribution of reactive energy.
 Gradually increasing demand on energy reliability and quality;
 Integration of renewable energy resources in existing power This paper presents the methodology for comprehensive
system; techno-economic assessment for both reactive energy measure-
 Such energy tariffs will reflect the real cost of energy for con- ment & tariff recommendations first time in Pakistan.
sumers and producers;
 Reduce the untapped reactive power as a means of energy 3. Overview of Pakistan electricity consumption and tariff
savings;
Energy consumption is an important sign of stable economy of
 A. Ahmad et al. / Energy 186 (2019) 115818 3

8 7.6

6 5.4
5
EUR/MVArh

2.78 3.1
4
3.1
2.78
3 1.42
2 0.14
0.71 0.31
1
0.14 0.31
0
Lithuania FYROM Northern Ireland Serbia Slovenia Estonia

Tariff/Penality, EUR/MVArh for induc ve Tariff/Penality, EUR/MVArh for capaci ve

Fig. 1. Tariffs/Penalties for reactive electrical energy at cos4 <0.95, by countries, 2017.

Table 1
Different methods of charging reactive energy billing cited by different papers.

Sr.# Reactive energy tariff methods Reference


1 0:9 [28]
Reaction power factor penalty ¼  1
Cost=KWh
cosØ1
2 Power factor tariff adjustment table (via a figure) is given for calculating the tariff/penalty. No mathematical model presented [29]
3  $  [17]
Reaction Energy Bill ¼ price multiplier
Energy unit price
kWh
vffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi
u
u 1 þ ðtan fÞ 2

t
Active Energy daily Consumption
1 þ ðtanf0 Þ2
4 Tariff/penalty for per MVARh has been fixed for inductive and capacitive loads [18]

any country. Household energy usage is almost half of the total essential to be considered in terms of power quality and reactive
energy consumption in Pakistan. However, household sector is energy. In addition to representing a larger portion of the coun-
considered as non-economic sector and consequently does not trywide electricity consumption, the total consumption by do-
contribute to the economic development of the country [30]. mestic loads continues to rise.
Therefore, it is mandatory to improve energy efficiency in house-
hold applications.
3.2. Current tariff policy in Pakistan
3.1. Economic growth and energy consumption
Tariff can be defined as the price of the electrical energy sup-
Pakistan economy is growing rapidly. This is the realization of its plied to the consumers. It includes the cost of power generation,
geographical importance and comprehensive plan of China- transmission, distribution, maintenance, metering, equipment,
Pakistan Economic Corridor (CPEC) between two nations. This billing, taxes and profit of an electric utility. The existing methods of
project also includes the installation and commissioning of new tariffs are based on active energy (kWh)/active power (kW), reac-
power generation plants in different areas of Pakistan. Pakistan tive energy (kVARh)/reactive power (kVAR) and power factor. In
economic development inspires the progress of the commercial Pakistan, electricity tariff for industrial consumers includes active
and industrial sectors for the welfare of the public. From 2012 to energy (kWh) prices, reactive energy prices and low power factor
2015, the Gross Domestic Product (GDP) per capita exhibited a penalties [32]. Apparent power (kVA)/capacity based charges are
rapid growth with an average increase up to 2.15% over the previ- only applicable to big consumers and goes some way in incentiv-
ous years. In 2012, the GDP per capita was US$ 1264.9: in 2015, the izing consumers to deal with their reactive energy consumption, as
corresponding number was US$ 1434.7 [31]. As the domestic en- this type of tariff encourage them to improve their power factors.
ergy users account for highest percentage of total energy con- Residential consumers only pay for active energy (kWh) consumed.
sumers in Pakistan, approximately 30 million domestic energy The tariff for residential customers does not include the billing of
meter are installed. In 2016, the total electricity consumption was reactive energy (kVARh)/reactive power (kVAR) and penalty for low
94.6 TWh. This includes 43.7 TWh consumption on domestic scale, power factor. However, these factors express the nature and quality
whereas industrial, agriculture, commercial and public sector of a customer's load. The tariff defined by NEPRA for the residential
consumes 25 TWh, 8.5 TWh, 7.0 TWh and 10.2 TWh respectively and commercial consumers of distribution companies (DISCO's) are
[2]. Therefore, electricity consumed by domestic appliances are named as A-1 and A-2 respectively [33].
4 A. Ahmad et al. / Energy 186 (2019) 115818

4. Methodology groups, the percentage of each household appliance in each energy

group is considered. Additionally, number of appliances in each
To calculate the energy consumption and reactive energy tariff, energy group and every house was also collected. Appliances with
it is essential to have a knowledge of total number of appliances, power ratings enquired in the survey form, average time of use and
their types, ratings, load cycle, power factor, THD and consumers total number of appliances calculated by the approach explained in
electricity consumption pattern. However, very limited information previous research [34] are given in appendix ‘A’. For in-depth
of demand side consumers exists for the developing countries like analysis, hourly and daily sampled energy consumption data of
Pakistan. To address this challenge, fundamental information were few households was acquired from their autonomous domestic
gathered via survey conducted in the region of a utility supply energy management system. It was very helpful to get the energy
company named LESCO (Lahore Electric Supply Company) followed consumption profile of each appliance of similar brands. The energy
by the survey conducted in previous research [34]. This survey units (kWh) profile of each appliance for the entire year is shown in
enquired consumers to provide their monthly electricity con- Fig. 2. This profile shows that how household consumers operate
sumption, dimensioning of electric appliances used in their houses their appliances over an entire year. Such type of profiles help
(all types with power ratings) and socioeconomic data such as electric supply distributor for tariff definition. Fig. 2 shows that use
number of family members and monthly income. of UPS, electric fans & refrigerator is maximum during April to
LESCO was selected to carry out the survey as it covers the entire September. The usage of electric kettle, heater and microwave oven
city of Lahore, as it is one of the largest urban resident city of is increased from October to February. This pattern also shows the
Pakistan. Secondly, by carrying out the survey in LESCO region, the living routine of the people. Mobile charger, laptop charger, CFL, FL,
focus was placed on big houses which are the main market for such IL and LED/LCD/TV usage is almost uniform over the year.
household appliances. Growth rate in comparatively big houses is Figure also shows that UPS as an individual appliance have
usually higher than 50% [35]. In response to questionnaire survey, maximum energy peak and whereas laptop charger energy con-
385 consumers returned survey form. Monthly load profile of all sumption contribution is minimum.
responses is expanded over a year. Dimensioning of available With the available data on consumer side, the next stage was to
household appliances was responded by 260 respondents. explore the electrical characteristics of commonly used household
Furthermore, 126 respondents added response on socioeconomic appliances for reactive energy tariffs. Mostly used uninterruptible
indicators. Likewise, on average five family members were living in power supply (UPS), a household appliance in Pakistan, has overall
a house and belongs to middle income group. efficiency as low as 50% and total harmonic distortion 78% [34].
In the previous research, based on monthly energy consumption Smart energy meter for single phase power user, installed by

300

250
CFL (24 W)
IL (100 W)
FL (90 W)
200
Washing Machine (500 W)
Microwave Oven (1000 W)
Energy (kWh)

Water Dispenser (500 W)

150 Mobile Charger (6 W)
Laptop Charger (45 W)
Juicer Machine (750 W)

100 Electric Heater (1000 W)

Electric Kettle (1000 W)
Refrigerator (100-200 W)
LED/LCD/TV (30 W)
50
Fan (100 W)
UPS (1000 W)

Fig. 2. Annual energy consumption profiles of individual household appliance.

 A. Ahmad et al. / Energy 186 (2019) 115818 5

Fig. 3. Circuit arrangement of experimental setup.

LESCO are constructed to measure only active energy according to

IEC 62053-21 standard. Whereas the energy meters for three phase
domestic consumers are designed as per IEC 62053-23 standard.
These meters measures both active and reactive energy on the basis
of fundamentals voltage and current quantity. As per the experts of Fig. 4. Hardware setup.
energy meter manufacturers (Microtech Industries) and energy
meter purchasers (LESCO), all type of smart meters have provision
of active, reactive energy, power factor and THD measurements. shown in Eq. (1).
This requires the re-programming of the smart meter. 0qffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi1
I 22 þ I 23 þ I 24 þ …I2n
THD% ¼ @ A
100 (1)
4.1. Experimentation I1

In this section, the experimentation scheme and testing method where I1 is fundamental component of load current and I2, I3, I4 up
used for electric quantities measurement in household appliances to In are the 2nd, 3rd, 4th and nth harmonic components of load
are presented. Firstly, the measurements needs connection of current respectively. The waveform of current drawn by linear load
hardware elements dedicated for electric energy measurements. is purely sinusoidal resulting in zero THD while the non-linear
This includes: voltage transformer (VT), utility supply, hall-effect loads have non-sinusoidal waveform resulting in non-zero THD.
sensor (HES), NI myRIO 1900, connecting leads, PC for LabVIEW The higher value of THD signifies a polluted or a low quality
environment and household loads. LabVIEW is a virtual program- load. According to the American National Standards Institute (ANSI)
ming environment that permits researchers to construct desired Standard C82.11, the upper limit for THDi is 32% for high frequency
programs with precise features [36]. The measurement equipment electronic ballast systems [37]. On contrary, the IEEE Standard
is located between the household load and utility supply as shown 519e1992 specifies the maximum limit of total harmonic distortion
in Fig. 3. in voltage (THDv) as 5% and for current (THDI) it is dependent on the
Voltage transformer and hall-effect sensor are used to collect short-circuit current ability of the utility supply [38].
voltage and current data of household load respectively. This data is Fig. 5 represent the THDi contribution of household appliances
further manipulated in National Instruments’ board “NI myRIO on the utility grid of LESCO. It can be seen that the highest
1900”. This data is then further analyzed for the quantification of contributor is a laptop charger having a value of is 148.76% and the
power quality parameters in LabVIEW software. LabVIEW provides lowest contributor is an electric heater having a value of 1.87%.
the platform where various programmable graphical palettes are The contribution of a television (TV), compact fluorescent lamps
available to incorporate the calculations of different power quality (CFL), fluorescent lamps (FL), electric fans and mobile battery
parameters like harmonics in current, total harmonic distortion chargers in THDi is 139.12%, 100.96%, 87.89%, 6.14% and 138.04%,
(THD), power factor, apparent power (VA), active power (W) and respectively.
reactive power (VAR) etc. During investigation, to make the results
more accurate and stable, the utility supply voltage was assumed to
be constant at 230 V and the data was manipulated using running 5.2. Power factor analysis results
average measurement technique. All measurements of current
signal are taken according to the IEC standard 61000-4-7. Hardware According to IEEE Standard 1459e2010, power factor of non-
setup is shown in Fig. 4. linear devices is defined as the product of displacement factor
and distortion factor. Displacement factor is the cosine of the angle
5. Results and discussion between voltage and current signals and distortion factor is given
pffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi
as 1 = 1 þ THD2 , where THD is the total harmonic distortion in
The analysis of the data obtained from the experimental setup current defined in Eq. (1). So the resultant formula of power factor
described in the previous section was conducted to observe the is given in Eq. (2)
total harmonic distortion, power factor and reactive power demand
of each household appliance. These results are discussed in detailed cosq1
Power Factor ¼ qffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi
ffi (2)
in the following subsections followed by the discussion of
1 þ THD2I
economics.
Power factor is also defined as the ratio of the load's active or
5.1. Total harmonic distortion in household appliances real power to the apparent power supplied by the source. Thus by
analyzing the power factor we can calculate the reactive power
Total harmonic distortion (THD) is the measure of the quality of demand of a device or load by using Eq. (2). The ideal or maximum
the voltage and current signals used by the load as compared to value of the power factor is unity which signifies zero utilization of
defined standard (sinusoidal) waveforms. Mathematical expression reactive power by the load. Any other value low quality of load or
of percentage total harmonic distortion, in current waveform, is equipment and depict the flow of unwanted reactive power flow in
6 A. Ahmad et al. / Energy 186 (2019) 115818

machine, electric heater and water dispenser, do not fulfill the

allowable power factor by the utility. Hence, these appliances
aggravate the power quality and burden the system by reactive
power demand. The local mobile battery chargers being extensively
used effecting the grid most adversely due to lowest power factor of
0.48 lagging. It has been analyzed that the overall average power
factor of all these household appliances is 0.78 lagging which is still
below the minimum allowed power factor value.
Considering the annual energy consumption of household
appliance shown in Fig. 1, it can be concluded the uninterruptible
power supplies (UPS) are the largest loads, 15% of the total domestic
consumer in Pakistan [34]. Also from Fig. 6, it can be observed that
UPSs have a full load power factor of 0.7 lagging. This implies that
UPSs have a major impact on the reactive power demand from the
utility and will adversely affect the power system.

5.3. Reactive power of household appliances

Mathematically reactive power is defined as:

 
Q ¼ P
tan cos1 PF (3)

where Q is reactive power (VAR), P is active power (W) and PF is

power factor. Eq. (3) clearly demonstrate that the power factor of
any appliance directly influences the reactive power demand.
Whereas, the flow of reactive power generally has an impact on
voltage, increase losses and may over-utilize a distribution network
Fig. 5. Percentage THDi of household appliances. capacity. Fig. 7 shows the percentage reactive power demand for
different household appliances. The ideal value of reactive power
based on the ideal value of power factor for any electrical equip-
the system. Allowable value of power factor in Pakistan is 90% [8]. ment is zero. However, as Fig. 7 shows that all the household
This means that maximum 43.6% of reactive power can be appliance exhibit a non-ideal behavior. So they demand a non-zero
demanded for any load. value of reactive power from the electrical grid. It can be seen from
The power factor for different household appliance are shown in the figure that the low power factor devices demand a larger per-
Fig. 6. It presents the comparison of ideal power factor (unity) to full centage of reactive power from the grid. While high power factor
load power factor for each appliance obtained by experimental devices demand lower reactive power from the grid. It can again be
results. The power quality of each device was monitored using the observed that incandescent lamps (IL), microwave oven, electric
experimental setup discussed in section 4.1. LabVIEW based Power kettle, washing machine, electric heater and water dispenser de-
Quality Analyzer. It can be observed that the mobile battery charger mand lower reactive power from the grid while all other appliances
has the least power factor i.e. 0.48 lagging while electric heater and demand higher reactive power. Again the mobile charger has the
water dispenser have highest power factor i.e. 0.99 lagging. Also it worst demand of the reactive power from the system i.e. 87.74%.
can be observed that all the household appliances, except incan- Considering the average power factor of household appliances
descent lamps (IL), microwave oven, electric kettle, washing

Full Load PF Ideal PF

1.2 0.97 0.99 0.99

0.97 0.97 0.99
Power Factor (PF)

1 0.87
0.81
0.8 0.71 0.670.7
0.57 0.53 0.56
0.6 0.48
0.4
0.2
0
Electric Heater
Microwave oven

LED/LCD/TV
Juicer Machine
Washing Machine

Water Dispenser
CFL
Electric Kettle
IL

Fan

UPS
Refrigerator
FL

Laptop Charger
Mobile Charger

Fig. 6. Power factor of household appliances under study. Fig. 7. Percentage reactive power (VAR) of household appliances.
 A. Ahmad et al. / Energy 186 (2019) 115818 7

i.e. 0.78 lagging, the average reactive power demand of household reactive energy is not billed. The data show that the reactive energy
consumers is 62.58%. This is a high value in comparison to the demand is significantly high and is even more then the active en-
allowable reactive power demand of 43.59%. Hence, some policy ergy demand in certain cases; the reason being low power factor of
should be imposed to influence the household consumers to the system. If the reactive energy is billed as a part of tariff then the
improve their power factor and lower their reactive power demand. customer will use high quality devices to reduce the bills or the
utility will get higher revenue to compensate the higher losses and
5.4. Economic prospective increased generation capacity requirements. It is highly recom-
mended to add the reactive energy tariff in the existing structure of
Active energy consumed by all the household appliance collec- the tariff. The price of the reactive energy depends on the
tively over the year is shown in Fig. 8. compensation of power factor and voltage under varying loading
The results of the graph shown in Fig. 8 are calculated by simply conditions [39]. It is difficult for the domestic consumers to install
multiplying the results of Fig. 2 with their respective quantity compensation equipment. Nevertheless, it is possible for con-
(Table A1) in LESCO network and then summing up in each month. sumers to use energy efficient household appliances to improve
The resultant energy consumed by all the household appliances power factor. Unity power factor at maximum load causes reactive
(from Fig. 8) over the year comes out to be 7.09
109 kWh. power to zero and total transfer capacity of power system could be
The reactive energy demand is calculated on the basis of average used to transmit active power.
power factor of 0.78 lagging, shown in Fig. 6, and domestic active
energy usage i.e.7.09
109 kWh. Using average power factor rela- 5.5. Proposed reactive energy tariff
tionship, where leading reactive energy is prohibited [33], is given
as; Reactive energy tariff calculations are very complicated as this
requires network voltage levels, nature of loads (dynamic or static),
kWh inaccuracies in parameter metering, modelling of transmission and
Power FactorðPFÞ ¼ pffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi (4)
kWh2 þ kVARh2 distribution network [39]. Reactive energy management is very
difficult for dynamic loads as compared to static loads. Currently
From Eq. (4), the reactive energy at 0.78 lagging power factor most of domestic loads are dynamic in nature and these are
comes out to be 5.69
109 kVARh. Reactive energy at 0.9 power increasing with the passage of time. Reactive power management
factor lagging (predefined value by NEPRA) comes out to be throughout the power system has a large impact on the efficiency
3.44
109 kVARh. The difference between reactive energy de- and quality of the energy supplied to customers. Reactive power
mands at two different power factors 0.9 and 0.78 is 2.25
109 plays a vital role in maintaining the voltage and power balance in
kVARh. This shows that the LESCO needs to supply surplus reactive transmission and distribution system. A vast research has been
energy of 2.25
109 kVARh to the consumers if their active energy carried out on the tariff structure of reactive energy transfer in
demand is 7.09
109 kWh. The reactive energy requires compen- transmission and distribution systems [16,22,27,28,40]. The cost of
sation either from consumer side or from utility supply company. the reactive energy consumed at low voltage side domestic con-
By strictly imposing the household consumers to limit their power sumers requires aggregated way and careful considerations. As this
factor at 0.9 lagging. Also, this imposition will result in the net is associated with the consumers variable active energy usage and
saving of active energy up to 1.1
109 kWh. hence it has variable and fixed cost. Surplus reactive energy in the
From the above discussion it can be concluded that the reactive system disturb the quality and magnitude of the supply voltage.
energy is a significant figure just like the active energy. Another Tariff regulations on the reactive power flow that satisfies the po-
case study in the network of University of Engineering and Tech- wer factor limit, usually 0.9 is required for economics try, optimum,
nology (UET), Lahore was conducted. The consumption of active efficient and safe operation of power system.
and reactive energy within this network is summarized in Table 2. There are six methods of reactive energy tariffs [29];
Ideally the ratio of reactive and active energy should be zero as
1) Based on maximum apparent power (kVA capacity based).

This method calculate the total energy charges based on the

following formula;

Total charges ¼ A ðkVAÞ þ BðkWhÞ (5)

where ‘A’ is cost per kVA and ‘B’ is cost per kWh. The low power
factor increases the kVA rating of the equipment/load.

2) Based on reactive load capacity

3) Based on consumption of reactive power
4) Based on average power factor (if consumer load is operating
below the predefined PF the charges will be imposed and for
high PF reward is awarded)
5) Based on minimum PF requirement (consumer need to install
reactive compensation)
6) Based on active and reactive power consumption (A consumer
having low PF will draw more current and hence shall have to
pay more charges)

In this method, energy bill is calculated by the sum of the kVARh

Fig. 8. Energy consumption profiles of all household appliances in LESCO. and kWh energy consumed by load as;
8 A. Ahmad et al. / Energy 186 (2019) 115818

Table 2
Active and reactive energy consumed in UET power system.

Months Active Energy (kWh) Reactive Energy (kVARh) Power Factor Ratio kVARh/kWh

December 2014 27760 24000 0.76 0.86

November 2014 59600 62560 0.60 1.05
October 2014 125920 84640 0.80 0.67
September 2014 175120 91280 0.80 0.52

assumed that the payback period of capacitor banks cost is 5 years

Total charges ¼ A1 ðkWhÞ þ B1 ðkVARhÞ (6) with 10% interest rate. Using
 the annualized cost to present value
n
ið1þiÞ
relation; A ¼ P ð1þiÞ n
1
, where A ¼ annualized cost, P ¼ present
where ‘A’ is cost per kWh and ‘B’ is cost per kVARh. The low power value, i ¼ interest rate and n ¼ period in years [42] the capacitor
factor increases the reactive energy demand by the loads. bank annualized cost comes out to 338782 $.
All the power factor based tariffs have some deficiencies. As the As explain in section 4 that smart energy meters have provision
inductive power factor causes to draw high current from the sys- of measuring all the power quality parameters. This requires re-
tem. This results in excessive voltage drop and power losses. programming of smart energy meters with cost 7 $/meter to up-
Capacitive power factor has adverse effects on the system in- date its features. Domestic consumers in LESCO are 30 million (as
stallations. Reactive compensation on consumer side is difficult mention in section 3.1). Total upgradation cost of smart energy
because of handling of switching of capacitor. meters is (7 $/meter)*(30 million meters) ¼ 210 million $. It is also
The existing tariff on low voltage side do not offer consumer assumed that the payback period of energy meters upgradation
incentives to control their reactive energy demand and results in cost is 5 years with 10% interest rate. Using the annualized cost to
poor lagging power factor. The proposed reactive energy tariff is present value relation, energy meters upgradation annualized cost
based on Mark Lively's Approach [41] depicted in Fig. 9. In this comes out to 55.4 million $.
paper only the lagging power factor tariff is considered. As the
domestic consumers have low voltage single or three phase supply
connection. 5.5.2. Proposed tariff structure
It is clear from Fig. 9 that leading power factor is not always good Based on the above annualized cost for both capacitor banks and
or bad, and so is lagging power factor. For the low voltages network, smart energy meters upgradation. The recommended tariff struc-
leading reactive power is short, it is advisable to reward customers ture for reactive energy is defined as three part tariff as:
who supply leading reactive power and to penalize those who
Total charges ¼ ða þ b*kVAR þ c*kVARhÞ $ (7)
consume it. The opposite is true for systems where there is abun-
dant leading reactive power. Some systems will get advantage from
leading power factor (e.g., systems having dominant low voltages),
while others will get advantage from lagging ones (e.g., systems
a ¼ Fixed cost in $. It includes capital cost of infrastructure like
having dominant high voltages).
capacitor banks and smart energy meters upgradation.
b ¼ $/kVAR of maximum demand recorded for the billing
period. It includes interest and depreciation on capital cost/
5.5.1. Capacitor banks and energy meter upgradation cost
infrastructure cost. The reactive power kVAR measured over any
Capacitors bank cost by various vendors in Pakistan varies from
period of not less than 15 min under normal conditions at the
4 $/kVAR to 6.5 $/kVAR. Required reactive power of the capacitor
delivery point.
bank to improve the power factor from 0.78 to 0.9 is 2.25
109
c ¼ $/kVARh of reactive energy consumed. It includes mainte-
kVARh/8760 h ¼ 2.57
105 kVAR. Considering the average price of
nance, repair and cost of line losses. The reactive energy kVARh
capacitor bank i.e. 5 $/kVAR, the present value of capacitor banks
is calculated based on the greater than allowable reactive power
comes out to be (2.57
105 kVAR)* 5 $/kVAR ¼ 1284250 $. It is
demand i.e. 43.59% of active power demand, charge for any
power factor below 90%.

Example.
A utility company supplied annual surplus reactive energy
2.25
109 kVARh to its 30 million domestic consumers due to low
power factor (0.78) from its pre-defined value (0.9). Maximum
demand of each consumer is Pmax.demand ¼ 5 kW, interest rate and
depreciation cost (b/month) is 20% of capital cost ($/kVAR), main-
tenance and line losses cost (c/month) is 10% of the capital cost
($/kVARh). Calculate the monthly reactive energy bill of each
consumer.
Solution:
Using three part tariff formula given in Eq. (7):

a ¼ Fixed cost (capacitor banks þ energy meters upgradation)

per month per consumer ¼ 338782 $ þ 55400000 $ ¼ 55738782
$/year ¼ 4644898.5 $/month ¼ 4644898.5 $/30000000 ¼ 0.155
$/month/consumer
b ¼ 20% of capital cost ¼ (0.031$/kVAR)/month/consumer
Fig. 9. Values used for tariff calculations. c ¼ 20% of capital cost ¼ (0.031$/kVARh)/month/consumer
 A. Ahmad et al. / Energy 186 (2019) 115818 9

kVAR/month/consumer ¼ 43.59% of Pmax.de- This results in a higher demand of reactive power from the utility
mand ¼ 5 kW ¼ 2.1795 kVAR. which can generate a revenue of $150 million. This will encourage
kVARh/month/consumer ¼ 2.25
109kVARh/ the household consumers to improve their power factor from 0.78
12 ¼ 187.5
106kVARh/30000000 ¼ 6.25 kVARh/month/consumer. lagging to 0.9 lagging. To ensure the use of high quality household
Put above values including ‘a’, ‘b’ and ‘c’ coefficients in Eq. (7) appliances by the consumers, this paper strongly advises that
We get. DISCOs (distribution companies) and NEPRA (National Electric
Total charges/month/consumer ¼ 0.155 $þ (0.031$/ Power Regulating Authority) to take into consideration the
kVAR*2.1795 kVAR) þ 0.031 $/kVARh*6.25 kVARh. household appliances characteristics as demonstrated in this paper
Average charges/month/consumer ¼ 0.155 $ þ $ þ 0.0676 and apply proposed reactive energy tariff.
$ þ 0.194 $
Average reactive energy charges/month/consumer ¼ 0.4166 $
Conflict of interest
Three part tariff will encourage the consumers to use highly
efficient appliances as the intensity of reactive power charge is
It is stated that all the authors of this manuscript “Tariff for
higher than the reactive power compensation on consumer side.
Reactive Energy Consumption in Household Appliances” have no
conflict of interest with any reviewer.
6. Conclusions and policy recommendations
Acknowledgment
Energy efficiency involves energy savings by reducing reactive
power drawn from system through efficient usage at consumer
We thank students of UET, Lahore, Sajjad Ahmed, Muhammad
end. Therefore, reactive energy tariff scheme should also be con-
Sohaib Shahid, Hamid Razzaq and Muhammad Umair Aslam for
cerned with energy efficiency. Reactive energy demand in house-
their assistance in various stages of survey, household appliances
hold appliances causes losses in power system. It is recommended
collections and experimentation in the laboratory. We thank ICT
that the future cost of electricity should also include the cost of
R&D Fund for providing funding for the hardware setup. Special
reactive power transmission, distribution, utilization, losses and
thanks are due to the Higher Education Commission (HEC) of
management at consumer end.
Pakistan for the funding which has enabled us to establish
Currently, there is no reactive energy tariff system for household
Advanced Electrical Drives Laboratory in the Department of Elec-
customers in Pakistan. Different reactive tariff systems are used in
trical Engineering at UET, Lahore.
different countries but does not exist in Pakistan. Most of the do-
mestic users in Pakistan have smart energy meters and have pro-
vision of reactive energy measurement at fundamental frequency. Appendix ‘A’
The proposed three part reactive energy tariff system includes fixed
cost of the capacitor bank installation and smart energy meters

Table A.1Household appliances detail.

Sr.# House Appliance Name Power Rating (Watt) *Average Use Hours/day Quantity in Millions

1 Compact Fluorescent Lamp (CFL) 24 9.5 12.62

2 Incandescent Lamp (IL) 100 2 0.30
3 Fluorescent Lamp (FL) 90 6 1.82
4 Washing Machine 500 2 1.33
5 Microwave Oven 1000 0.5 0.19
6 Water Dispenser 500 4 0.06
7 Mobile Charger 6 3 11.96
8 Laptop Charger 45 1 0.31
9 Juicer Machine 750 0.5 0.93
10 Electric Heater 1000 1 0.13
11 Electric Kettle 1000 1 0.18
12 Refrigerator 150 14 1.23
13 LED/LCD/TV 30 10 2.46
14 Fan 100 9 10.34
15 Uninterruptible Power Supply (UPS) 1000 7 0.45
*
Average time of use in hours per day is considered during the peak season of a year.

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