A food processing plant has a contract demand of 2500 kVA with the power supply
company. The average maximum demand of the plant is 2000 kVA at a power factor of
0.95.
The maximum demand is billed at the rate of Rs.300/kVA. The minimum billable
maximum demand is 75 % of the contract demand. An incentive of 0.5 % reduction in
energy charges component of electricity bill are provided for every 0.01 increase in power
factor over and above 0.95. The average energy charge component of the electricity bill per
month for the company is Rs.10 lakhs.
The plant decides to improve the power factor to unity. Determine the power factor
capacitor kVAr required, annual reduction in maximum demand charges and energy
charge component. What will be the simple payback period if the cost of power factor
capacitors is Rs.800/kVAr ?
CALCULATION:
kW drawn 2000 x 0.95 = 1900 kW
Kvar required to improve power factor from
0.95 to 1
kW ( tan 1 – tan 2)
kW ( tan (cos-1) – tan (cos-2)
1900 ( tan (cos-0.95) – tan (cos-1)
1900 (0.329 - 0)
625 kVAr
Cost of capacitors @Rs.800/kVAr Rs.5,00,000
Maximum demand at unity power factor 1900/1 = 1900 kVA
75 % of contract demand 1875 kVA
Reduction in Demand charges 100 kVA x Rs.300
Rs.30000 x 12
Rs.3,60,000
Percentage reduction in energy charge from
0.95 to 1 @ 0.5 % for every 0.01 increase
2.5 %
Monthly energy cost component of the bill Rs.10,00,000
Reduction in energy cost component 10,00,000 x (2.5/100)
Rs.25,000/month
Annual reduction Rs.25,000 x 12
Rs.3,00,000
Savings in electricity bill Rs.6,60,000
Investment Rs.5,00,000
Payback period 5,00,000/6,60,000
0.76 years or 9 months
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