Economics of Power Utilization

EE 2802 Applied Electricity

Contents
1.Cost of electric power
2.Factors influencing costs & tariffs
3.Load curve
4.Tariff
5.Reduction of energy costs

6.Power factor correction

1. Cost of Electric Power

Fixed cost
Running / Operating cost

All should be considered before fixing

the final kWh charges for the consumers

Fixed Cost
Interest on capital
investment
Allowance for
depreciation
Taxes & insurance

Most of the salaries

& wages
Small portion of the
fuel cost

Operating Cost
Most of the fuel cost

Small portion of
salaries & wages
Repair &
maintenance

2. Factors Influencing Costs &

Tariffs
1. Demand

2. Diversity of demand

- Maximum demand of various

consumers not occur simultaneously
- This results in lower costs of electric
energy

2. Factors influencing Costs &

Tariffs
3. Load Factor

Equipments are selecting for maximum

demand
Fully occupied or not, there are fixed
charges
Poor load factors -> charge per kWh high
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To improve load factor -> accepting off-

2. Factors influencing Costs &

Tariffs
4. Power Factor

Productive power - consumed in the

resistive loads
Non-productive power consumed in
inductive and capacitive loads
Low power factor -> greater non-productive
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current

3. Load Curve
Following information can be obtained
Maximum load
Size of generator unit required
Daily operating schedule

4. Tariff
Fixed charge

for the portion of the plant that have

been
allocated to him
Variable charge
- for the units used by him (per kWh)
Maximum demand charge
- charge for the maximum demand (per
kVA)
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CEB Tariff - Domestic

10

Up to 30 units
30 ~ 60 units
60 ~ 90 units
90 ~ 180 units
units
180 ~ 600
units

Fixed Charge
Charge
(Rs/month)
60.00
90.00
120.00
180.00

Unit Charge
(Rs/kWh)

240.00

25.00

3.00
4.70
7.50
16.00

CEB Tariff - Industry

I-1
I-2
I-3
I-2 (TD) Peak
Off
peak
I-3 (TD) Peal
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Off

Fixed
Unit
Charge
Charge
(Rs/month) (Rs/kWh)
240.00
10.50
3000.00
9.30
3000.00
9.10
3000.00
24.60
8.40
3000.00

23.00
8.00

Demand
Charge
(Rs/kVA)
675.00
650.00
650.00

650.00

Example

12

A consumer has a maximum demand of

10kW with a load factor of 60% and p.f.
0.8 lag. The traffic in force is Rs. 650.00
per kVA of max. demand per month, Rs.
9.10 per kWh and Rs. 3000.00 as the fixed
charge.
a. Calculate saving in his monthly bill if he
improves p.f. to 0.9 lag
b. Show the effect of improving load factor
to 80% with the same max. demand and

5. Reduction of Energy Cost

How to reduce energy cost?
Monitor energy consumption
Choose energy efficient appliances and
methods
Reducing energy consumption makes;
Reduce energy cost
Reduce pollution and make their
communities greener
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6. Power Factor Correction

p.f. of all AC motors and transformers is <

1
Majority of industrial motors are induction
motors
High p.f. at full load
Low p.f. at light loads
For a 3-phase balanced system;
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Low p.f. -> high current

6. Power Factor Correction

Disadvantages of low power factor
Line losses (I2R) is high
Large equipment are required high
capital cost
Large voltage drop need extra
regulation equipment
Low efficiency
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6. Power Factor Correction

Power factor improvement
Inject a leading current into the circuit
1. Installation of static capacitors
2. Installation of synchronous motors
3. Phase advancers

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6. Power Factor Correction

1. Static Capacitors

Capacitor may result in over-correction

To overcome automatic p.f. correction
(control the no. of capacitors)
2. Synchronous Motors
Employed instead of induction motors
Or use synchronous capacitors only for
p.f. correction
3. Phase Advancers
Method of manipulating the phase angle
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