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Economic Evaluation
of Power Quality
E lectric power quality disturbances can have
significant economic consequences for many
different types of facilities. A wide variety of solu-
tion technologies exist for mitigating the conse-
quences of such disturbances, and a methodology
for performing a comparative economic analysis is
featured in this article.
Different technologies are evaluated by estimating
the improved performance that can be expected after
the technology has been applied. The power quality
cost savings are calculated for each technology along
with the costs of applying the technology. The net ben-
efits, expressed in terms of annual costs, are shown as a
means of comparing the various technologies.
Economic Impacts
of Power Quality
The costs associated with power outages can be tre-
mendous. Manufacturing facilities have costs rang-
ing from $10,000 to millions of dollars associated
with a single interruption to the process. The costs to
commercial facilities (banks, data centers, customer
service centers, etc.) can be just as high if not higher.
Unfortunately, these facilities can be sensitive to a
wider range of power quality disturbances than just
outages that are counted in utility reliability statistics.
Momentary interruptions or voltage sags lasting less
than 100 ms can have the same impact as an outage
lasting many minutes.
This has resulted in a wide variety of technologies
for equipment protection and improving power qual-
ity. Utilities must also evaluate the need to improve
the quality of supply if there are large numbers of
customers impacted by power quality variations.
The evaluation of power quality improvement al- ®
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ternatives is an exercise in economics. Facility man-
agers and utility engineers must evaluate the
economic impacts of the power quality variations
against the costs of improving performance for the different al- Improving facility performance during power quality varia-
ternatives. The best choice will depend on the costs of the tions can result in significant savings and can be a competitive
problem and the total operating costs of the various solutions. advantage. Therefore, it is important for customers and suppli-
Note that the solutions should include options for improving ers to work together in identifying the best alternative for
performance on the utility supply system. achieving the required level of performance.
The economic evaluation methodology described here con-
This article is part of a series of articles on power quality appearing in this issue
sists of the following four steps:
l Characterize the system power quality performance
and the the August, September, and November 2001 issues of IEEE Power Engi-
neering Review. M. McGranaghan and B. Roettger are with Electrotek Con- l Estimate the costs associated with the power quality varia-
teristics.
We will use the industry 0.6
standard method of characteriz-
ing voltage sags using the mini-
mum voltage magnitude and the 0.4
duration of the sag (time that the
voltage is below specified 0.2
thresholds). The sag duration is
determined by the length of
time required for the protective 0
0.00 0.01 0.10 1.00 10.00 100.00 1000.00
devices to detect the fault and
Seconds
open. One useful duration char-
acterization is defined in IEEE Figure 2. Year 2000 rms voltage variations and process disruptions