Are we really improving the power factor of the equipment / an electrical installation by having Power Factor Correction Units Installed?
When someone say power factor pf of an electrical unit it basically means the ratio between the real power (kW) and the apparent power (kVA). Technical terms we can say that the cosine value of the angle between real power and apparent power is the power factor.
According to the power factor of an machine , it needs certain amount of real power as well as reactive power for its proper operation. When there is no local reactive power sources, the equipment will draw its reactive power from the national grid. The more the power factor, the more the reactive power drawn from the national grid and hence, the power supply companies will have to charge you based on the reactive power consumed. The power supply companies may introduce some penalty schemes in order to encourage the customer not to draw the reactive power required from the national grid as the power supply companies have to inject more reactive power into the grid by means of Synchronous Condensers.
The most know local source of the reactive power is the capacitor bank, which is generally connected to the LV system at the Main Switchboard (MSB) level. This will of course reduce the reactive power drawn from the national grid as it can supply most of the reactive power requirements. Due to this reduction in the reactive power drawn from the national grid, the overall power factor seems to be improved. But, that does not mean any improvement in the power factor of an equipment / installation, which remains same. In other words, the source of reactive power only get changed and no changes in the demand for the reactive power.
So, when we calculate the current drawn, size the circuit breaker, size the cable, etc. we should not use the improved overall power factor and rather, we must use the actual power factor of the equipment / an installation.
Most of the people think that once the power factor is improved by the help of capacitor bank installed at the MSB level, they can reduce the size of the cables, circuit breakers, etc. This is completely wrong unless the power factor correction takes place at the load itself, which is not the case in most of the installations nowadays.
