All electrical devices require active power in order to function. Active power is used for the actual work, such as running an electric motor. Many electrical devices also require reactive power. An electric motor needs reactive power to maintain the motor’s magnetic field.

The reactive power can be generated with the power plant’s generators and transmitted to the point of use via the grid and the transformers. Along the way, reactive power uses up the capacity of the power grid and causes losses. In the image below, the point of use is indicated with an electric motor.

Instead of a single motor, the point of use may be a building, for example. Sites like that have many devices that require reactive power behind the electrical room on site.

The power grid company aims to eliminate the transfer of reactive power via the power grid. By charging reactive power fees, the power grid company steers its customers towards compensating for the reactive power on site, as close to the point of use as possible. Power factor correctors installed in the immediate vicinity of the point of use generate reactive power locally, freeing power grid capacity for transporting active power. Compensation for a single motor can be carried out with a capacitor unit installed in its terminals:

The most typical solution is to install a detuned filter capacitor bank in the electrical room to compensate for the reactive power required by all devices connected to the room:

The power factor Cosϕ of an electric motor ranges from 0.7 to 0.85. The power factor correction equipment brings the power factor close to 1.0 but no higher; in fact, it should remain slightly under 1.0 to be safe. As stated above, instead of a single electric motor you can talk about the power factor of a site (building, industrial facility…) and power factor correction for the site.

In electrotechnical terms, this can be represented by the power triangle:


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