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What is local power factor compensation and its benefits?

What is local power factor compensation and its benefits?

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Generally, the parallel capacitor banks are static source of reactive energy which shall be produced by power system as an alternative for reactive power generation in power plant via large power generators. The best location of this compensation system in the point of technical-economical view can be obtained regarding system configuration and power system study. The power factor correction capacitors can be installed at high voltage bus, distribution, or at the load. The power factor correction capacitors can be installed for a group of loads, at the branch location, or for a local load. The benefits due to the power factor correction for the utility are release in system generation capacity, savings in transformer capacity, reduction in line loss, and improved voltage profile. The benefits due to power factor correction to the customer are reduced rate associated with power factor improvement, reduced loss causing lower peak demand, reduced energy consumption, and increased short-circuit rating for the system. An example of local capacitor bank application for the power factor correction is shown in below Figure. In this scheme, the individual loads are provided with separate capacitor banks. This type of reactive compensation is mainly suitable for industrial loads. The localized power factor correction can be expensive. Shunt capacitors provide reactive power locally, resulting in reduced maximum kVA demand, improved voltage profile, reduced line/feeder losses, and decreased payments for the energy. Maximum benefit can be obtained by installing the shunt capacitors at the load. This is not always practical due to the size of the load, distribution of the load, and voltage level. Depending on the need, the capacitor banks are installed at extra-high voltage (above 230 kV), high voltage (66

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