Electrical distributions are essentially made of three different load types.  These are: resistive, inductive and capacitive.  The inductive loads are requiring a magnetic field to operate.  This field requires electrical energy but actually does not produce any real work.  These loads are typically motors and transformers.

• The work output is called real power.
• The energy required by the magnetic field is called reactive power.

Having a bad power factor means that the distribution system is drawing more current than what is required to accomplish the real work and that the load losses of the distribution system are greater.  Moreover, all utilities penalize customers with low power factor.
 

Power factor correction allows:

To reduce electrical costs
To reduce load losses of the distribution system
To increase system's capacity
To maintain a better voltage regulation

The addition of capacitors to the distribution network is the ideal way to provide reactive compensation and bring the power factor to an acceptable level.  The capacitors are acting as a storage device of reactive power which reduces the reactive power that the utility has to provide to the distribution network and in turn improves the power factor of the system.

Capacitors can be added to the distribution network in the following ways

Permanently:

Capacitors are connected directly to the lines and are in circuit all the time.
Advantages:  minimum cost, easy installation.
Disadvantages:  possibility of overcompensation, is seen as a load when all other loads are diconnected.
 
 

Controlled:

Capacitors are switched on and off by contactors that are controlled by a power factor regulator.
Advantages:  accurate correction of the power factor, easy installation.
Disadvantages: requires more room.
 
 

At the motors:

Capacitors are installed at the motors and connected either at the motor leads or between the contactor and the overload relay.
Advantages:  maximum reduction of system's losses.
Disadvantages:  economically not viable unless the motor load is mostly constitued of large motors.

Warning:
 

The presence of harmonic distortion on the distribution network can make it difficult or perhaps impossible to install capacitors as it could generate a resonance condition.  In such case the use of harmonic filters is recommended to reduce the harmonic distortion and to correct the power factor.  As a rule of thumb, a distribution network having more then 20% of its loads being controlled with variable speed drives is susceptible to have harmonic problems.  For more information on harmonic filters and their application please consult the part of this website about harmonics, or contact us.