- Low power factor raises apparent power and current, and utilities pass the cost to customers through kVA demand billing, a power factor adjustment or a direct charge on reactive power.
- IEEE 519-2022 sets voltage and current distortion limits at the point of common coupling between the network and the customer, and the current limit depends on the ratio of short-circuit current to load current.
- Installing power factor correction capacitors in a plant with harmonics can create a resonance that amplifies them, so harmonics are measured first and detuned capacitor banks used where needed.
This article is general technical guidance; decisions on installing capacitors and filters need a study by a qualified electrical engineer under your distribution company's regulations.
What is power quality?
Power quality describes how closely the voltage and current in a facility match the ideal: a clean sine wave at a steady frequency and a stable voltage. Its problems include voltage dips, swells and short interruptions, but two issues affect daily operations and the bill at the same time: low power factor and harmonics.
IEEE 519 sets goals for the design of electrical systems that include both linear and non-linear loads, and its limits apply at the point of common coupling (PCC), the interface between the network and the customer. [1] Non-linear loads such as variable speed drives, UPS systems and rectifiers are the main source of harmonics. [6]
Power factor: why pay for power that does no work?
Power factor is the ratio of active power (kW), which does the work, to apparent power (kVA), which flows through cables and transformers. When inductive loads pull it down, the facility needs more current to do the same work, so cable losses rise and part of the transformer capacity is used for nothing. [5]
Utilities pass the cost of this larger equipment and the losses caused by reactive current on to the customer through a power factor penalty, usually applied to the demand portion of the bill. [5]
How does power factor appear on the bill?
Tariffs vary from country to country, but power factor usually enters the bill in one of three ways: kVA demand billing, kW demand billing with a power factor adjustment, or a direct charge on reactive power. [5]
A published Eaton example shows the difference: a facility with a demand of 4,000 kW at 0.87 power factor is billed on 4,598 kVA under a kVA tariff, and on 2,268 kvar under a tariff that charges for reactive power. [5] The benefit is not only on the bill: in the same paper, a 450 kW load on a 500 kVA transformer at 75% power factor (about 600 kVA) needs about 250 kvar of capacitors to reach 95%, a better solution than replacing the transformer with the next standard size, 750 kVA. [5]
| Billing method | What is measured | Effect of low power factor |
|---|---|---|
| kVA demand billing | Maximum kVA | Higher kVA for the same kW |
| kW with adjustment | Maximum kW and power factor | Billed demand is increased |
| Reactive power charge | kvar or kvarh | Direct charge on kvar |
In the GCC, requirements depend on the distribution company. In Abu Dhabi, the Department of Energy’s Electricity Wiring Regulations 2020 (clause 4.1.7) require power factor to be maintained between 0.9 lagging and unity at the connection point, with power factor correction equipment used where needed to achieve this. [4] In the other emirates and GCC states, check your distribution company’s regulations and tariff schedule before working out the business case.
Hypothetical example: a facility at 0.80 power factor
With illustrative figures: an industrial facility with a maximum demand of 800 kW at a power factor of 0.80.
- Apparent power = 800 ÷ 0.80 = 1,000 kVA.
- To raise power factor to 0.95, the compensation needed = 800 × (tan φ1 − tan φ2) = 800 × (0.750 − 0.329) ≈ 337 kvar.
- New apparent power = 800 ÷ 0.95 ≈ 842 kVA, a reduction of about 16% in current.
- Cable losses are proportional to the square of current, so they fall to about (0.842)² ≈ 71% of their previous level.
If the tariff bills on kVA, billed demand falls by about 158 kVA on every bill with no change in output. Improving power factor much beyond 0.95 is usually not economical. [5]
Harmonics: where do they come from and how are they measured?
Harmonics are currents and voltages at whole multiples of the fundamental frequency, such as 250 Hz for the fifth harmonic on a 50 Hz network. They are produced by non-linear loads that draw non-sinusoidal current, and in low-voltage networks the fifth is usually the lowest-order dominant harmonic. [6]
Two measures need to be kept apart:
- THD: expresses harmonics relative to the present fundamental.
- TDD: expresses harmonics up to the 50th order relative to maximum demand current, so the two match only at full load. [2]
The difference matters in practice: a facility running at half load may show a current THD that looks alarming, while the TDD against which IEEE 519 limits are compared is within the limit.
At equipment level, IEC 61000-3-2 limits the harmonic currents emitted by equipment with an input current up to 16 A per phase connected to public low-voltage networks, a useful reference in purchasing specifications. [3]
IEEE 519-2022 limits: what is measured, and where?
Voltage distortion limits in IEEE 519-2022 depend on the bus voltage at the PCC: [2]
| Bus voltage | Individual harmonic | THD |
|---|---|---|
| Up to 1 kV | 5.0% | 8.0% |
| Above 1 kV up to 69 kV | 3.0% | 5.0% |
| Above 69 kV up to 161 kV | 1.5% | 2.5% |
| Above 161 kV | 1.0% | 1.5% |
Current distortion limits for systems from 120 V to 69 kV are graded by the ratio of maximum short-circuit current to maximum load current at the PCC (ISC/IL), from a TDD of 5% where the ratio is below 20 to 20% where it exceeds 1,000. [2] In other words, a facility connected to a weak network is allowed less distortion.
The PCC is the interface between the network and the customer, and treating an internal point as the PCC is not in line with the standard’s original intention. [2] The 2022 edition is current; a Project Authorization Request (PAR) for its revision was approved on 26 September 2024, and the new edition will supersede it once published. [1]
In Abu Dhabi, the wiring regulations refer the permitted limits for disturbances, including harmonics, to Annex 1 of the Electricity Distribution Code, and require owners to install filters or other equipment where those limits are exceeded. [4]
When harmonics meet power factor correction capacitors
This is where the most expensive mistake happens. A capacitor bank together with network inductance forms a resonant circuit that can seriously amplify harmonics from variable speed drives, overloading, overheating and over-voltaging connected equipment. [6] Capacitor-only correction is therefore difficult where harmonic distortion is present, and calls for a thorough engineering analysis. [5]
The usual answer is a detuned capacitor bank, with a reactor that moves the resonant point away from the harmonics present. Typical options include a 7% reactor tuned to the 3.78th order for strong harmonic environments, and a 5.65% reactor tuned to the 4.2nd order for moderate ones. [6]
Practical steps for a power quality audit
- 1The billBilling method and monthly power factor
- 2MeasurementAt the PCC over a representative period
- 3CalculationVoltage THD and current TDD
- 4ComparisonIEEE 519 and distribution regulations
- 5MitigationCapacitors, reactors or filters
- 6VerificationSecond measurement and bill follow-up
- Start with the bill: identify the billing method and extract the power factor for each month.
- Measure at the PCC with a power quality analyser over a period covering the full operating cycle, not a single hour.
- Calculate voltage THD and current TDD after establishing ISC and IL.
- Compare with IEEE 519 limits and your distribution company’s regulations.
- Choose the mitigation based on the measurements: standard capacitors where harmonics are low, detuned banks or filters where they are high.
- Verify with a second measurement after installation and follow the next bills.
Conclusion
Power quality is not a technical matter separate from financial management: power factor shows up on the bill and harmonics show up as equipment failures. Measure at the point of common coupling first, understand how your tariff is billed, and do not install capacitors before you know the harmonic level.
Frequently asked questions
What is the minimum acceptable power factor?
It depends on the country and distribution company. In Abu Dhabi, for example, the Electricity Wiring Regulations 2020 require power factor to be kept between 0.9 lagging and unity at the connection point.
What is the difference between THD and TDD?
THD expresses harmonics relative to the present fundamental current, while TDD expresses them relative to maximum demand current, so the two match only at full load. The current limits in IEEE 519 use TDD.
Can power factor be raised all the way to 1?
Technically yes, but improving it much beyond 0.95 is usually not economical; the aim is to stay within the range set by your distribution company's regulations.
Do IEEE 519 limits apply to every panel inside a plant?
No. The limits are set for the point of common coupling between the network and the customer, and treating an internal point as the PCC is not in line with the standard's original intention, although internal measurements help locate harmonic sources.
Which standard covers harmonics from small equipment?
IEC 61000-3-2, which limits the harmonic currents emitted by equipment with an input current up to 16 A per phase connected to public low-voltage networks.
References
- IEEE Standards Association. P519 — Standard for Harmonic Control in Electric Power Systems (2024)
- Comsys AB (powerquality.blog). Power quality – IEEE 519-2022 (2023)
- International Electrotechnical Commission (IEC). IEC 61000-3-2:2018+AMD1:2020+AMD2:2024 CSV — Limits for harmonic current emissions (equipment input current ≤ 16 A per phase) (2024)
- Department of Energy, Abu Dhabi. The Electricity Wiring Regulations (2020) (2020)
- Eaton. How to Lower Your Electrical Bill Without Reducing Energy Usage (2006)
- Powerside. Safeguard Against Resonance with Low Voltage Detuned Capacitor Banks
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