Collecting Economic Data in Power Quality Survey

POWERQUALITY
Briefing Paper
David Chapman
Copper Development Association UK
Roman Targosz
European Copper Institute
November 2009
Collecting Economic Data in
Power Quality Survey

Power Quality
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www.leonardo-energy.org
About Study Committee 4
I. ECONOMIC FRAMEWORK FOR POWER QUALITY 7
BASIC ECONOMIC CONCEPTS OF POWER QUALITY 7
1. The importance of power quality 7
2. Common PQ phenomena 9
3. Response of equipment to PQ events 12
4. Economic consequences 14
II. METHODOLOGY FOR COLLECTING POWER QUALITY
ECONOMIC DATA 17
1. Introduction 17
2. Data collection 18
2a. Direct Economical Analysis 23
2b. Indirect Economical Analysis 23
III. APPROACH FOR END-USERS 26
A. Process interruption 27
A 1. Work in progress 27
A 2. Labour 29
A 3. Process slow down 30
A 4. Process restart 32
A 5. Equipment 32
A 6. Other cost 33
A 7. Savings 34
A 8. Total process interruption cost 35
B. PQ phenomena cost 35
B 1. Non-interrupting voltage dips 35
B 2. Harmonics (current and voltage) 36
B 3. Surges and transients 42
B 4. Voltage fluctuations and flicker 43
B 5. Unbalance 46
B 6. Earthing and EMC 49

Collecting Economic Data in Power Quality Survey
3
C. Cost of postponed PQ effects 50
C 1. Cost of ageing of equipment in power networks 50
C 2. Mis-operation cost 56
D. Conclusions 57
IV. STRUCTURING THE DATA COLLECTION PROCESS 59
A. Taxonomy 59
A1. Critical sectors 59
A2. Cost categories 61
A3. Cost types - Operating consequences 61
A4. PQ phenomena 62
A5. Equipment: 62
A6. PQ consequences 63
A7. Solutions 64
B. Executing data collection process – end user perspective 65
V. APPENDIX A EFFECTIVENESS OF PQ SOLUTIONS 69
VI. APPENDIX B COMPONENTS & PROCESS FLOW OF
ECONOMIC DATA COLLECTION 73
VII. APPENDIX C INTERNATIONAL EXAMPLES OF PQ
COST SURVEYS 75
I. Interruptions 75
II. Dips 82
VIII. BIBLIOGRAPHY 87
IX. ACKNOWLEDGEMENTS 88

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About Study Committee
CIGRE-CIRED-UIE Joint Working Group (JWG) “Economic Framework for
Power Quality”.
JWG C4.107 has been established in CIGRE, in conjunction with CIRED
and UIE, with the purpose to study and analyse economics related to
power quality. The JWG initiated work in 2006.
Rationale: Various independent studies have been undertaken by utilities,
manufacturers, consultants, regulators, and research organisations, to
estimate the cost of power quality problems to the power systems and
their customers. A good understanding of the basis for determining these
costs is important in assessing appropriate interventions (either by the
power network operators or by the customer themselves). The purpose of
the group is to study and analyse economics related to power quality.
http://pqeconomics.webexone.com
The scope of the JWG is:
• Review and document the economic implications of the power quality
parameters: voltage dips, short interruptions, and voltage waveform
quality.
• Review and document methods of assessing these costs that have
been used to date, including aspects such as:
∗ Direct and indirect costs to customers (e.g. production losses and
plant damage).
∗ Energy losses associated with poor power quality.
∗ Cost of energy not supplied

5
• Methods of collecting customer costs.
• Actual customer costs collected to date for various industry sectors.
• Propose a standardized method of collecting the above information,
based on the experience of various international studies.
• Recommend a methodology of using this data to cost and motivate
power quality interventions on the power system or within the
customer plant.
• Provide indicative costs for specific industry sectors, where possible.
Long interruptions are not considered as part of the scope of this Group,
as this has been extensively addressed by the previous Cigré study
committee 38 - (published as TB 191) in 2001. (can be purchased from
http://www.e-cigre.org/Order/select.asp?ID=192)
Time schedule: Initiation of the JWG: 2006; Final deliverables: end 2009.
The group works under framework of CIGRE Committtee C4.
The Mission of SC C4 is to facilitate and promote the progress of
engineering and the international exchange of information and knowledge
in the field of System Technical Performance. To add value to this
information and knowledge by means of synthesizing state-of-the-art
practices and developing recommendations".
http://www.cigre-c4.org/home.asp
Another CIGRE-CIRED-UIE C4.110 Joint Working Group “Voltage Dip
Immunity of Equipment Used in Installations” works on technical aspects

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of voltage dips.
The work scope is providing industry with guidance on what measures to
take in ensuring that their plant is not adversely affected by voltage dips.
http://www.jwgc4-110.org/l
Both authors contribute to the collaborative work of JWG C4.107 Group.
This report describes authors view on economic data collection.
As introduction the general information about the Group framework is
provided in the report
The results of the C4.107 study will be published in form of the report,
which is expected by end of 2009.

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I. ECONOMIC FRAMEWORK FOR POWER QUALITY
BASIC ECONOMIC CONCEPTS OF POWER QUALITY
1. The importance of power quality
‘Power Quality’ (PQ) is the term generically used to describe the extent to
which the electrical energy available at the point of use is compatible with
the needs of the load equipment connected at that point. The effects of a
lack of compatibility are termed ‘PQ problems’ or ‘PQ issues’.
Compatibility is a two-sided equation as the characteristics of both the
electrical power supply AND the load equipment are important variables.
There are many parameters for which compatibility is necessary, including
supply voltage level, voltage stability, waveform distortion due to
harmonics and interharmonics, voltage unbalance between the phases
and long and short-term availability of the supply.
When there is a lack of compatibility, end user equipment may cease to
function, operate erratically or incorrectly, may operate outside its normal
envelope at reduced efficiency or in such a way that its operating life is
reduced. The situation is further complicated by the fact that many PQ
issues are caused by the operation (or mis-operation) of end-use
equipment that is connected to the network.
Electrical and electronic equipment rarely operates in isolation. Even the
simplest of commercial operations requires the interoperation of several
items of equipment – the use of a personal computer usually requires the
aid of some communications equipment, a network and a printer, for
example. In other words, the failure of one piece of equipment usually
results in the failure of a process that may or may not affect other
processes. Regardless, however, when process equipment ceases

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operation, the result is financial loss. Depending on factors such as the
nature of the business, the organisation of the work flow (whether
continuous processing or batch production) and the value of the product,
this loss may range from the trivially small to the extremely large.
There are two obvious approaches to ensuring 100% compatibility
between electric power supply and end use loads: either design and
construct a perfect electric power delivery grid, or make all end-use
devices perfectly tolerant of common PQ issues. Unfortunately, for a
number of reasons, neither of these approaches represents the economic
optimum. Firstly, some loads are relatively insensitive to many PQ
phenomena while being rather sensitive to others. Incandescent lighting
is insensitive to harmonic distortion, but overly sensitive – in combination
with the human response - to flicker caused by small, cyclic, voltage
disturbances. On the other hand, electronic equipment is not disturbed by
the scale of voltage instability that causes flicker while it is very sensitive
to voltage dips and to higher levels of harmonic voltage distortion. Making
every supply suitable for every load would be expensive and is
unnecessary. Secondly, although the cost of designing and
manufacturing any individual piece of equipment to be ‘immune’ is not
large, that cost is multiplied by the total number of pieces of equipment in
use and represents a very large economic burden on consumers. Thirdly,
the option of building a very robust, very clean, system would be
extremely high and it would be very difficult, if not impossible, to
guarantee a minimum performance level at all points of common coupling.
In the near future, increased penetration of distributed generation will
make this even more difficult as generation is added at medium and low
voltage levels. Lastly, many PQ issues arise within the consumer’s
premises, due to the characteristics of the installed equipment, sub-
optimal installation of equipment and cabling, poor electromagnetic
compatibility (EMC) performance of earthing systems, etc, so perfection at
the point of common coupling is no guarantee of perfection at the point of
use.

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2. Common PQ phenomena
Figure 1: Classification of PQ phenomena
PQ phenomena are well documented elsewhere; the following paragraphs
give a brief description of the most economically disruptive phenomena.
• Voltage dips
A voltage dip is a short-term reduction in voltage. It is specified in terms
of duration and magnitude of retained voltage. Voltage dips are the result
of increased voltage drop in the system caused by increased current flow,
either as the result of the addition of a large load, for example the starting
current of a large motor, or due to a fault current. Those caused by large
loads are generally localised, often within the same installation, while
those due to network fault currents can be widely distributed and affect a
large number of consumers. The characteristics of network dips -
magnitude and duration - depend on many factors, including the voltage
level at which the fault is located, the response time of the protective
devices, the degree of network meshing, the number and configuration of
transformers, etc. Most fault-induced dips are caused by single-phase or
90%
100%
110%
1 s 1 min 1 h
voltage swells
voltage dips
short interruptions long interruptions
10%
vvvoltage changes
and fluctuations
duration of disturbance
rmsvoltageaspercentageofnominal

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two-phase (phase to phase) faults. Because three-phase faults are less
common than single- and two-phase faults, simultaneous dips in all three
phases are also less likely.
• Voltage fluctuations
The primary cause of voltage fluctuations is the time variability of the
reactive power component of fluctuating loads such as, for example, arc
furnaces, rolling mill drives, main winders, etc. In general, these loads
have a high rate of change of power with respect to the short-circuit
capacity at the point of connection to the supply.
The magnitude of the fluctuations is often such that the supply voltage
remains within the permitted voltage tolerance band but the cyclic nature
of the variation, combined with the characteristics of tungsten lamps and
the response of the human eye and brain, lead to a sensation of flicker.
Flicker is an impression of unsteadiness of illumination that can cause
loss of concentration, headaches and, in some cases, epileptic fits.
• Harmonic distortion
Harmonic frequencies are integral multiples of the fundamental supply
frequency. Current harmonics are generated within the system and in
consumer loads by the non-linear behaviour of magnetic materials,
rectifiers and electronic converters. Although harmonic frequencies have
always been present in the electricity system, the increase in the number
of items of equipment using electronic power control in recent years has
led to increased levels. Voltage harmonics are created by harmonic
currents as they flow through system impedances. Non-linear loads draw
harmonic currents from the supply, so producing a corresponding
harmonic voltage drop in the impedance of the supply network. As a

11
result all consumers see harmonic voltage distortion on the supply
voltage. Standards have been introduced to limit the emission of
harmonic current by individual items of equipment and by installations in
an attempt to limit the overall level of harmonic distortion on supply
networks. Fortunately, the design of networks tends to mitigate some of
the effects of harmonic load current – delta transformer windings sink the
third and ninth harmonic currents emitted by single-phase loads, for
example.
Electronic converters also introduce other frequencies into the supply,
known as interharmonics. So far, the magnitude of interharmonic voltages
is small.
• Unbalance
A three-phase supply system is said to be balanced if the three-phase
voltages and current have the same amplitude and are separated by 120
degrees with respect to each other. If either of these conditions is not
met, the system is said to be unbalanced. Unbalanced supply voltage
usually arises because of unequal loading of the phases at the low voltage
level where most of the loads are single phase. Other causes are the
asymmetry of the distribution system and the connection of large non-
three-phase loads, such as railway connections and arc furnaces.
• Transients
Transient disturbances are high frequency events with durations much
less than one cycle of the fundamental supply frequency. Causes include
switching or lightning strikes on the network and switching of reactive
loads on the consumer’s site or nearby sites. Transients can have
magnitudes of several thousand volts and so can cause serious damage
to both the installation and the equipment connected to it. Non-damaging
transients can cause severe disruption due to data corruption.

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3. Response of equipment to PQ events
• Data processing and communications equipment
This type of equipment operates internally from a low voltage dc supply
derived from the ac supply by a rectifier and electronic converter. It is
insensitive to moderate levels of harmonic distortion and can be made
immune to most transients, but it is sensitive to voltage dips.
When the supply voltage drops during a dip, the amount of energy
delivered to the load is reduced. The ability of the equipment to ‘ride
through’ the dip depends on the amount of stored energy available from
the internal power supply capacitor and the instantaneous energy
requirement of the device. A personal computer (PC) will have a better
ride through capability while processing than it would have while writing to
an optical drive, for example.
IT equipment dip performance is described by curves such as the
Computer and Business Equipment Manufacturers Association (CBEMA)
curve and its more modern replacement, the Information Technology
Industry Council (ITIC) curve. These curves show the safe operational
envelope of the equipment on a nominal voltage/time plot. If the duration
and retained voltage during a dip lie above the boundary, the equipment is
likely to continue to operate normally.
In reality, these curves simply specify typical equipment performance; they
do not imply that the equipment will survive the dips that typically occur on
the network.

13
• Variable speed drives
Variable speed drives (VSD) use an electronic converter to produce a
variable frequency motor drive voltage from the fixed supply frequency.
Using VSDs is much more energy efficient than using belts and gearboxes
to change speed or using throttle valves to control fluid flows. They are
used extensively in industrial processing, materials handling and building
management.
During a dip the amount of energy supplied by the electrical system is
reduced and may be below that required by the process, resulting in loss
of control. Since motor controlled processes rarely operate in isolation,
this can result in loss of synchronisation with other parts of the process
and uncoordinated shut down.
VSDs usually include a number of measures to protect the electronics and
the motor from abnormal conditions, such as under voltage or loss of a
phase voltage, that may trigger shut down in the event of a dip.
VSDs draw harmonic currents from the supply. Many drives are designed
to minimise or eliminate these currents. VSDs are not affected by normal
levels of harmonic distortion.
• Lighting
Any change in supply voltage magnitude may cause a change in the
luminous flux or spectral distribution of a light source.
Incandescent light sources are particularly sensitive, as the luminous flux
is approximately proportional to the cube of the applied voltage. They are
susceptible to ‘flicker’, which is a subjective visual impression of
unsteadiness of a light’s flux, when its luminance or spectral distribution

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fluctuates with time. The human eye-brain response to variation of
luminous flux produces fatigue and loss of concentration for relatively
small variations in light intensity at frequencies of about 2 to 20 Hz.
Gas discharge lighting is less sensitive to traditional flicker, partly because
it is often electronically controlled, but is affected by a flicker effect due to
jitter caused by voltage variation due to interharmonic voltage distortion.
Gas discharge lighting is sensitive to dips: if a dip is deep enough to
extinguish the discharge, a hot lamp may not re-strike when the voltage
returns to normal.
• Solenoid operated contactors
Solenoid operated contactors and relays are used in large numbers in
process control systems and they are particularly sensitive to voltage dips.
‘Hardened’ devices are available, but are relatively rarely used.
• Transformers
Transformers are affected by harmonic currents. Part of the load loss of a
transformer is due to eddy current losses in the windings – usually around
5 to 8% of the loss is due to eddy currents and the remainder due to
conductor resistance. Eddy current losses are proportional to the square
of frequency so harmonic currents have a serious effect on the heat
generated within the transformer, leading to higher operating
temperatures and significant reduction in transformer lifetime.
4. Economic consequences
From the descriptions of equipment responses it is apparent that the
economic consequences of poor PQ fall into three categories:
• Complete or partial loss of one or more processes (e.g. loss of

15
control following a dip)
• Poor long term productivity or product quality (e.g. as a result of
operator fatigue due to flicker)
• Increased costs due to reduction of equipment lifetime, resulting in
premature failure (e.g. overheating of transformers due to
harmonics).
These consequences take effect over very different time scales.
A process failure, triggered by a PQ event such as a dip, has immediate
consequences followed by a period of recovery during which further costs
may be incurred. It is relatively easy to identify the costs that result from a
single event or to predict what the costs might be.
Continuous or prolonged conditions, such as flicker, can reduce long term
productivity. If the problem is prolonged and widespread, the business
may become uncompetitive and may require additional borrowing to
sustain it.
Premature failure of equipment will usually result in process failure with
similar consequences to those caused by single PQ events. The
difference is that the causes are in the past and were unrecognised,
suggesting that predicting these costs is difficult unless a survey
procedure is put in place.
Depending on the type of operation in question, the economic
consequences may range from trivial to catastrophic. The user can take
several approaches:
• Do nothing, and suffer the consequences
• Take responsibility by adding mitigation equipment or hardening
measures within the installation

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• Working with a supplier to improve the level of PQ by local measures
specifically for, but external to, the installation
• Negotiate with a supplier for a guarantee of a defined level of PQ,
along the lines of an insurance policy.
‘Doing nothing’ – business as usual - is only viable for those enterprises
that use batch processing for manufacturing and data handling. Process
interruptions are limited in their impact and be relatively easily mitigated
by, for example, reorganising work schedules. The economic
consequences are not zero, but may be acceptable to the business.
In every other case the first steps in analysing the economic impact of PQ
on a particular organisation, or part of an organisation, include:
• obtaining thorough and continuing measurements of relevant PQ
parameters
• logging of process failures and their costs and relating their
occurrence to PQ events
• assessing the likely failure modes and failure rates of processes and
items of equipment, bearing in mind the different time scales
involved
• considering options for redesigning processes to reduce
interdependence and reduce the risk of cascading failures
• investigating options for hardening process equipment against PQ
events and conditions.

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II. METHODOLOGY FOR COLLECTING POWER QUALITY
ECONOMIC DATA
1. Introduction
Interruptions exceeding 1 minute (IEEE) or 3 minutes (EN 50160:1999)
are classified as ‘continuity and reliability of supply’ issues rather than
‘power quality’ issues. More than ten years ago, long interruptions were
considered the only practically measurable consequence of the
deterioration of the quality of the power supply. Nowadays, although long
interruptions remain the more damaging events for some sectors (such as
residential, agriculture and general commerce), most sectors experience
much greater losses due to voltage quality problems.
Voltage dips and short electrical power interruptions are common power
quality issues and are major contributors to financial losses of modern
industrial and commercial end users. Although individually not as
detrimental as long duration outages, voltage dips and short interruptions
occur much more frequently. Most often, economic losses are incurred
when the disturbances cause nuisance tripping of sensitive equipment,
which in turn leads to a halt in manufacturing or other business processes.
For large industrial and commercial customers, the annual consequences
of process disruption due to voltage disturbances can reach millions of
dollars.
The potential economic impact of PQ issues on customers’ operations can
be assessed by considering:
• the predicted level of PQ disturbances and their severity
• analysis of the sensitivity of operations on the site to PQ
disturbances
• historical data relating to the impact of PQ disturbances.

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The first two steps of this procedure are described below for the case of
voltage dips:
The evaluation of the impact of voltage dips at a particular site in the
network requires fault-analysis followed by voltage dip analysis.
In fault analysis, various types of faults (symmetrical and asymmetrical)
are simulated at numerous locations throughout the system network and
the corresponding expected voltage magnitudes and durations (assuming
100% reliable primary protection, i.e. the duration of voltage dips is
determined by the primary protection settings) are determined at various
network buses.
The subsequent voltage dip analysis is performed for the point-of-common
-coupling (PCC) of interest. The frequency of dips of specified dip
magnitude and duration over a period of interest is determined by
associating the fault analysis result with the historical fault performance
(fault per km per year) of all network buses, overhead lines and
underground cables. This information is generally available from historic
data obtained from long term monitoring at representative locations in the
network.
In order to determine whether the equipment will be affected by, or will
ride-through, a dip of specified magnitude and duration, the expected
voltage dips are compared with the sensitivity of process equipment
connected at a given bus. This procedure requires the preparation of a
chart showing both the dip performance for a particular bus in the system
and the responses of the customer equipment to these voltage dips.
Precise information relating the equipment response to voltage dips is
required, which may be obtained from the equipment manufacturer or by
testing. Since the testing of each and every piece of equipment is neither
justifiable nor possible, sensitive industrial equipment is classified into

19
categories and testing performed on a suitable number of items of
equipment selected at random from each category. However, even
though the equipment may belong to the same equipment category, it
might not exhibit the same sensitivity to voltage dips making it difficult to
develop a single standard defining the sensitivity of process equipment.
In addition, most processes rely on many pieces of equipment and may be
disrupted by the tripping of any, or even one, of them depending on their
interconnections and interdependencies. Therefore, for any assessment of
financial losses incurred in a customer facility due to voltage dips, the
precise counting of process trips, rather than individual equipment trips, is
essential.
The equipment sensitivity to voltage dips is usually expressed only in
terms of the magnitude and duration of voltage dip. For this purpose, the
rectangular voltage-tolerance curve (as shown in the figure below) can be
used. It indicates that a voltage dip deeper than the specified voltage
magnitude threshold (Vmin) and longer than the specified duration
threshold (Tcrit) will cause malfunction (or trip) of the equipment.
However, in practice, most of the equipment, e.g. motor-contactors and
household electronics items would have non-rectangular voltage-tolerance
characteristics. Two parameters, which may be detrimental to sensitivity of
some of the industrial equipment (though to a lesser extent than voltage
dip magnitude and duration) such as motor-contactors, are the point-on-
wave of dip initiation and the phase-shift during the dip.
Figure 2: Equipment Voltage-Tolerance Curve

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The probabilistic assessment of the number of process trips incorporates
the uncertainty coupled with the equipment sensitivity as well as the
uncertainty associated with possible connections of various items of
equipment involved in an industrial process.
2. Data collection
The methodology for the collection of economic data on the
consequences of PQ is presented below. Once this data has been
collected, it will remain valid until a significant change takes place, such as
the provision of new or modernised production facilities, or the installation
of PQ immunisation measures. The precise approach will depend on
business activity sector, type of disturbance, PQ phenomena under
consideration and required level of assessment accuracy. Both end users
and electricity suppliers are affected.
For the end user, deciding which data to collect requires a detailed
understanding of the production processes and identification of the most
significant cost categories. Some costs, such as contractual penalties,
loss of reputation, brand damage and loss of strategic customers, occur
over a long time period. For an accurate result, it is important to include
the financial savings - such as reduced energy costs, raw materials and
staff resources – as well as the financial costs of an interruption.
Historical information on, for example, site turnover, profitability, asset
value and capital cost, electricity bill, electrical system maintenance cost,
past investments in PQ mitigation, etc., will be helpful to extend the
practical use and analysis of the data. Non-financial data, such as
employment levels, working time system, electrical system configurations,
power and energy quantities and loading, are necessary to complete
some calculations and to benchmark the impact of PQ on site activity. The
ultimate objective of economic data collection is preparation of the basis

21
for the analysis of PQ investment.
Data can be collected either at particular time intervals, most practically
annually (or on a pro rata annual basis when the frequency of
disturbances is less than once per year), or on a cost per event basis,
particularly in cases where the PQ disturbance and its consequences are
well defined and occur over a short time scale.
The first method, periodic collection, may apply to flicker, most harmonic
and unbalance impacts, EMC and earthing related problems. The second
method, cost per event, is best used to assess impact of, for example,
voltage dips, surges and transients and to calculate the financial
consequence of process interruption.
Electricity suppliers are responsible for the delivery of electrical energy at
a particular PQ level, usually defined or implied by a contract with end
user. Apart from the consequences of non-compliance to contract, they
also suffer the loss of revenue for energy not supplied when end users’
activities are disrupted by a PQ related stoppage. The capital and
operating expenses of any mitigation equipment and PQ improvement
measures are the elements of the Power Network Operators costs.
Most often, economic losses are incurred when disturbances cause
nuisance tripping of sensitive equipment, which in turn halts
manufacturing or other business processes. For large industrial and
commercial customers, the consequence of process disruption can reach
millions of dollars.
Realising the potential magnitude of losses due to voltage dips and short
interruptions, more and more industrial and commercial customers have
started to seek protection, both technical and contractual, from the impact
of these disturbances. The most common approach is to install mitigation

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devices (sometimes known as ‘custom power’) to isolate processes from
disruptive events. The alternative approach is to contract for a higher
quality of supply by means of a power quality contract with the electrical
utility. However, regardless of which option is preferred, the investment
must be economically justifiable.
Power quality problems other than voltage dips are much less studied in
practice. There are only a few examples of documented costs of
harmonics, unbalance, surges, transients or problems related to earthing.
The reasons for investigating the cost of PQ are:
• to build awareness of the potential magnitude of PQ costs which may
affect the productivity of the company
• while statistics and previous experiences are helpful, no two
companies, even when operating in the same sector, will be equally
vulnerable to PQ disturbances
• as PQ becomes subject to contract between a user and a supplier,
the cost of PQ needs to be quantified to establish the so-called
‘Willingness to Pay’ as is a measure of a value of improved PQ for
which the user is going to pay a premium
• in case of failure caused by a PQ event for which the supplier is
contractually liable, the amount of compensation will need to be
determined. A previous cost survey will help to establish the
methodology, allowing a prompt and accurate determination of the
amount.
• awareness of the cost of PQ will help to minimise it. Once their
potential contribution is recognised, many small and simple
incremental improvements are possible without significant
investment.

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2a. Direct Economical Analysis
Some of the data collected may be the historic or post mortem analysis of
the consequences of a PQ problem. This data will be a valuable source of
information, provided that the methodology was correct and adequate.
However, subsequent changes and improvements in the organisation of
the company may have a significant effect on the applicability of this data
for the direct economic analysis presented in this report.
The data collection process must address the issue of seasonality, i.e. the
extent to which the cost of PQ depends on the time when it was incurred.
Many businesses have a seasonal cycle, so the effects on costs and
profitability depend heavily on the timing of an interruption with respect to
the business cycle. In terms of immediate effects, the timing may
determine the necessity of evacuation of staff, customers or neighbours
and the ability to make up lost production to meet the market demand
cycle.
This publication is primarily about ‘raw’ economic data collection. Such
data provides highly accurate and reliable information which may be
further used to perform analysis for investment in PQ mitigation measures.
However, indirect methods exist to map the economic PQ consequences
in a company, for example, by industry sector, annual turnover, annual
energy consumption (or unused energy due to outage) and/or peak load.
The PQ impact assessment in such cases is limited to voltage dips and
interruptions.
2b. Indirect Economical Analysis
When the information required for economic analysis is not available,
indirect economic analysis is the only option to estimate the financial
losses due to power quality disturbances. Common ways of indirect

Power Quality
24
analysis include the customer willingness to pay and customer willingness
to accept methods and estimation of the cost from the size and value of
mitigation solutions.
Customer’s Willingness to Pay and Willingness to Accept
The customer’s willingness to pay (WTP) method has been used in
several studies to obtain the costs of power supply interruptions. Usually,
customers are given several hypothetical outage scenarios and asked to
assess the amount of money that they would be willing to pay in order to
avoid each of them. In terms of power quality, customers are asked to
assess their willingness to pay for different levels of power quality
improvements. Though the WTP method may not be as technical as the
analytical approaches, it reflects the value customers place on electricity
supply and power quality.
However, one should anticipate that the amount that a customer is willing
to pay will be lower than the actual financial damage likely to be caused
by the power quality disturbance. This is because an economical benefit
could only be achieved if the financial damage due to power interruption is
more than the amount paid to avoid the damage. Therefore, from the
customers’ point of view, the WTP amount will always be less than the
actual damage due to power quality disturbances.
The WTP method makes sense only when customers understand the
damaging effects of power supply interruption on their processes. Usually,
the effects of total power interruption are more apparent and well-known.
However, the effects of other power quality disturbances, such as voltage
dips that cause partial disruption of processes, are not straightforward. In
most cases, customers do not know the financial damages due to power
quality disturbances, and therefore cannot place an accurate WTP value
on them.

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In the customer’s willingness to accept (WTA) method, electricity users
are given various imaginary outage scenarios and asked to estimate the
amount of compensation that they would be willing to accept for each of
them. The WTA and WTP methods are similar in that they each require
customers to place a monetary value on hypothetical outage scenarios.
However, in most cases, the WTA method gives substantially larger
values compared to the WTP method. The reason behind this is that
customers consider the electricity supply as a social right rather than a
market commodity and expect to be compensated if it is absent. It is
recommended that the two methods are used together to produce upper
and lower limits for power interruption costs.
Both WTP and WTA methods are heavily dependent upon the customer’s
subjectivity in placing a value on power quality costs, and may be
influenced by other considerations, such as their perception of electricity
supply, their knowledge of power quality disturbances and their ability to
pay.
Cost Estimation from Historical Events
Over the years, numerous surveys have been carried out around the
world to gather information regarding financial losses of various industrial,
agricultural, commercial and even residential customers. By reviewing the
studies to date, the financial loss information can be gathered and
aggregated to represent different customer types and sizes and can be
conveniently used to estimate PQ related costs of a particular customer.
To obtain realistic cost estimation from historical events, one would have
to use historical values from the customer type that best resembles the
customer of concern, ideally obtained from customers of similar nature
and size, and within the same geographical region. Unfortunately,
information gathered from historical events is still insufficient to meet

Power Quality
26
these requirements. Most studies produced cost values for total power
interruption, but without considering the impact of other power quality
disturbances. Some produced cost values for voltage dips but have yet to
determine cost values for different severity levels of voltage dips. Overall,
cost estimates from historical events without considering the customer’s
equipment and process sensitivities will not produce accurate financial
loss values.
III. APPROACH FOR END-USERS
For all PQ consequences, the methods to be followed can be of two types:
deterministic or probabilistic. Deterministic methods are appropriate when
all the items of the analysis, from the operating conditions of the system to
the discount rate value, are known with reasonable certainty, which is the
case for analysis performed on existing systems whose operating
conditions are repeatable and well defined. Probabilistic methods are
needed when some of the problem variables are affected by uncertainties,
such as for systems in design or under construction and where expansion
of an existing system is being planned. However, technicians are often
involved in estimating the future costs of operation of existing systems
when both cash flows and operating conditions of the system vary over a
range and thus introduce a degree of uncertainty.
There are basically two approaches in the process of collection of direct
PQ costs; either driven by consequences (see Appendix - Taxonomy F)
or disturbances - PQ phenomena (see Appendix – Taxonomy D).
The proposed methodology suggests unification of the data collection as
process interruption cost (sometimes also referred to as production
outage cost) for all kinds of disturbances. Other costs which cannot be
attributed to process interruption (as an immediate effect) are proposed to
be collected on a case by case basis for each PQ phenomena or as

27
postponed effects (premature ageing and mis-operation).
Cost assessment can be performed using a method of in depth interview
with staff responsible for production like internal service or maintenance
departments and if possible management staff responsible for site
production technology and production cost issues. Furthermore some
financial staff assistance might be required.
This method was applied in the LPQI PQ cost survey. The survey form
can be found at:
http://www.leonardo-energy.org/european-power-quality-survey
A. Process interruption
A1. Work in progress
W Work in progress (WIP) lost or wasted due to a process disruption.
Material and labour wasted as a consequence of any PQ disturbance -
phenomena (2D).
(1)
where:
W1 is the cost of unrecoverable WIP
W2 is the cost of reworking recoverable WIP to a usable standard
When production and services in progress are partially wasted, W1
describes only that part which cannot be recovered.
21 WWW +=

Power Quality
28
The issue of cost recoverability is absolutely essential to understand
and quantify. Irrecoverable means that the (semi-finished) product of an
interrupted process will not be repaired, used in a further process or sold
as a lower quality product.
WIP1 (2)
where:
M unrecoverable material lost, consisting of purchase price cost plus
overhead cost of purchase plus site transportation, less scrap or residual
value.
E energy cost unrecoverably lost in WIP €/kWh
LWIP1 labour cost defined as
(3)
where the right hand side of equation represents the sum of a number [i]
of different processes/operations, each of which consumes [ni] hours of
(wasted) labour at an hourly rate [Li] and hourly overheads [Oi] which
express hourly depreciation rates of fixed assets or rental cost of
equipment owned or used by the company.
[Oi], in the simplest case, or where differentiation into processes
makes only negligible calculation difference, this will be the
number of wasted labour hours multiplied by the cost of
labour, including overhead costs.
Both M and L are expressed in monetary value.
LEMW ++=1
∑ +×=
i
iiiWIP OLnL )(1

29
For that part of the WIP that can be recovered, W2 represents the cost
of labour required to complete the product to normal standard.
(4)
The symbol definitions are analogous to those in (3)
As described under the definition of W1, it is crucial to assess how much
of WIP can be recovered; during surveys staff may underestimate both
W1 and W2.
In reality there is often enough spare capacity to allow production to return
to normal levels within a reasonably short time, but this may not be the
case for time-sensitive or seasonal goods or where fresh or perishable
produce is being processed.
Establishing W1 and W2 requires an in depth analysis of cost elements.
One practical approach would be to monitor production costs for a period
following an outage and compare them with costs for a similar period with
no outages. The balance between W1 and W2 is sometimes difficult to
assess because the decision to reuse or scrap WIP is subjective and may
depend on conditions at the time; for example, if raw material were in
short supply or on long lead times, WIP would be more likely to be reused.
A2. Labour
LOUT The cost of lost or idle labour (i.e. the cost of staff who are unable
to work) due to a process interruption, starting from the moment of
interruption and ending when normal process activity resumes.
The symbol definitions are analogous to those used in (3).
∑ +×=
2
222 )(2
i
iii OLnW

Power Quality
30
(5)
Symbols marked with a prime [’] indicate terms which account for the
redeployment of labour to other tasks (not related to the stoppage) or the
employment of additional labour to aid recovery of the process. If the staff
responsible for the operation or process [i] is completely idle and no
additional labour cost will be required to compensate for lost time, the [’]
value will be zero. If the staff is redeployed to other tasks which are
necessary but are not stoppage related, the difference in the working time,
labour and overhead rates are accounted for in the prime terms which
would be subtracted from the non-prime elements. If additional labour
was required to recover from the stoppage, the prime terms would be
added to the non-prime terms.
A3. Process slow down
This cost subcategory can be used either as a supplementary element to
process interruption costs (for example, when a process is restrained by
the failure of another, e.g. a bottling process which is slowed down by the
failure by one of several product processing lines) or as a specific
alternative approach for some sectors - see ‘Appendix: Structuring the
data collection process’. In the case of independent use, care must be
taken to avoid overlap with other process interruption costs.
P If equipment or a process is affected by a power quality disturbance,
activity may be reduced, e.g. because only a fraction of parallel
processes are operating, operate at a slower rate or some fraction
of the product is out of specification.
The value should be an estimate per single event
))''(')(( 3
3
3
3
33
3
i
i
i
i
ii
i
OUT OLnOLnL ∑ +×±+×=

31
(6)
where:
P1 is the consequential loss caused by the reduction in efficiency
below normal due to reduced production due to limitations on capacity or
speed, temporarily loss of synchronisation, additional restarts and resets,
re-calibration, repair and maintenance and increased defect rate.
(7)
where:
T The annual cost of sales (i.e turnover minus profit). In cases where
no raw materials (including energy) are lost, the annual ‘added
value’ should be used. If the effect is simply to reduce the
efficiency of labour, the annual cost of labour should be used.
WT Normal annual working time of organisation. This is average time in
a year when company is working, taking account of shift patterns,
holidays, etc.
n Number of hours for which efficiency is reduced
Percentage reduction of level of activity. This is the best
assessment of the reduction in performance (as a sole result of PQ
disturbance) compared to normal activity from the broadest
possible perspective.
and
21 PPP +=
ff
T
En
W
T
P Δ××=1
ffEΔ

Power Quality
32
P2 The cost of dealing with out-of-specification product by, e.g., repair,
rework, recycling or scrapping.
Where the under performance of a production process can be calculated
more precisely, that method should be preferred.
A4. Process restart
PR Process restart cost. When a process is interrupted, other ancillary
processes, such as heating, cooling, ventilation and filtration, may
also trip. These processes must be re-established and verified
before the main process can restart, requiring additional time and
labour. Some checking procedures, such as cleaning in paper or
food production, may also be required.
Typical cost items are materials, consumables (calculated directly in
monetary units) and labour calculated using equation (3).
In cases where the interrupted process is restarted from an independent
power supply until normal power supply conditions are restored, all the
operating costs of the generating equipment form part of the Process
Restart cost.
A5. Equipment
E Equipment damage. When a process is interrupted the shutdown
occurs in a disorderly manner and it is possible that equipment will
be damaged as a result. Damage may be instantaneous (e.g.
damage by mechanical collision) or incremental (e.g. by
overheating due to loss of coolant) leading to shorter equipment
life, increased maintenance, etc.

33
The value should be an estimate per single event:
(8)
E1 Equipment damage cost consisting of:
• cost of equipment and tools damaged beyond repair and scrapped.
Scrap or recovered value should be deducted
• cost of repair, adjustment and calibration of damaged equipment and
tolos
• cost of installation of new equipment, parts and tolos
• cost of hiring replacement equipment
• other indirect costs of equipment damage, e.g. additional costs for
backup equipment, extra (compared to normal scenario) cost of
additional overhaul in future.
This category typically includes transformers, capacitors, motors, cables,
contactors, relays, protection and control, computers, lights, tools.
and
E2 Additional maintenance, repair, material and consumables costs as
a consequence of the process interruption. Examples are bearings,
pads, fuses, compressed air, water, oil.
Value of this cost should be expressed directly in monetary units.
A6. Other cost
O Other process interruption related, usually indirect, costs:
The estimated value per single event in monetary units, including:
21 EEE +=

Power Quality
34
• penalties due to contract non-delivery or late delivery
• environmental fines / penalties
• cost of evacuation of personnel and equipment (also external)
• costs of personnel injury (additional inability to work)
• increased insurance rates (equipment, personnel health, liability)
• compensation paid out
• hidden costs from loss of:
∗ Competitiveness
∗ Reputation
∗ customer satisfaction and, as a consequence, lost
opportunity of subsequent revenues
∗ employee tolerance
• Other non-specified indirect or direct costs.
A7. Savings
SS. Savings.
Note: It is likely that interrupted operations can save money or defer
expenditure. This usually is defined in terms of ‘unused raw
materials’, ‘unpaid wages for contracted/temporary staff’ or ‘savings
due to reduced energy usage’.
Because of idle time resulting from PQ related disruption, some ‘savings’
might be generated. The value of these savings as a consequence of the
particular PQ disturbance can be:
• savings from unused materials or inventory

35
• savings from wages that were not paid
• savings on energy bill
• other specific savings.
A8. Total process interruption cost
Finally the process interruption cost for each event are expressed as
(9)
B. PQ phenomena cost
As described above, these costs are collected only if the PQ disturbance
does not cause process interruption!
B1. Non-interrupting voltage dips
When a voltage dip occurs, but no disruption results because the process
is protected by the operation of a mitigation device (such as a UPS,
voltage restorer or stabiliser), the additional cost of operating this
equipment should be included here. This may include any additional
maintenance or inspection, but not installation, cost. Where the main
supply cannot be quickly restored and backup supply equipment, such as
diesel generating sets, take over the supply, the operating costs (e.g. fuel)
should be included.
It may also happen that voltage dips disturb, but do not halt, the
production process; these consequences should be assessed as
described under Process Interruption:
• Process slow down (6),(7)
76543218 AAAAAAAA −+++++=

Power Quality
36
• Equipment damage (8), particularly E2
B2. Harmonics (current and voltage)
The effects of the voltage and current distortion on equipment and
components fall into three classes: additional energy losses, premature
ageing and mis-operation. The term ‘additional’ means that these losses
are superimposed on those normally present at the fundamental
frequency. ‘Premature’ refers to the possibility of an increased ageing rate
with respect to the nominal service conditions. ‘Mis-operation’ refers to the
loss of equipment performance with respect to the normal conditions.
Specifically, the effects of harmonic distortion on the electricity supply
network are not instantly visible but can have serious consequences in the
medium and long term, the most important ones being:
• subjecting equipment in both electricity users’ installations and the
network to voltages and currents at frequencies for which it was not
designed
• derating of network equipment, such as cables and overhead lines,
due to the additional harmonic load
• derating and overheating of transformers, particularly due to
saturation effects in the iron core and increased eddy current losses
in the windings
• premature ageing of network equipment and consumer appliances,
due to the exposure of e.g. insulation materials or electronic
components to excessive harmonic voltages and currents
• additional Joule losses in conductors due to skin effect
• neutral conductor overload due to the cumulative effect of currents at
harmonic orders of odd multiples of three

37
• destruction of power factor correction capacitors in customers’
installations due to the amplification of harmonic current by
resonance.
Harmonics may cause the production process to stop, in which case the
PQ cost data are collected as described under Process Interruption.
Otherwise, harmonics may still cause PQ costs and the effects may be
quantified by using the same approach as above for Non-interrupting
voltage dips. Some specific harmonic cost may be:
Losses due to complaints with clients
The calculation should be based on the cost of labour (salary x person x
hours) dedicated to discuss the problem with the client, in addition to the
cost for transportation and measuring equipment investment.
To calculate extra harmonic losses the following methods may be helpful:
Joule losses in aerial and underground power networks
This grows with the square of the growth of the harmonic voltage.
Extra Joule losses in phase conductors caused by harmonic currents in
aerial and underground power networks can be calculated according to
the proposed simplified method as follows:
(11)
euros/year = (kW) x 3 x 10-3 x 8760 (h/year) x E (euros/kWh )
tELIZP
n
nnlinesinlosses
⋅⋅⋅⋅= ∑
∞
=2
2
__
3

Power Quality
38
where:
Plosses in lines losses (quantified in euros/year)
Zn impedance harm. n (W/km)
In averaged current harm. n (A)
L total lengths of line (km)
E price energy (euros/kWh)
T time (h)
The total Plosses in lines value of the whole power system is then calculated
by addition of partial Plosses in lines values corresponding to different ranges
of networks
In case of LV lines there are significant additional losses in the neutral
conductor caused by harmonic currents being an odd multiple of three
times the fundamental frequency.
Some studies suggest that this neutral current in downsized neutral
conductor may reach levels exceeding phase currents.
These losses can only be assessed precisely by measurements in every
part of the network. For practical purposes, an approximate figure can be
calculated by scaling the network loss at fundamental frequency by the
square of total harmonic current distortion and the ratio of the resistive
component of network impedance at the prevalent harmonic current
spectrum to the resistive component of network impedance at
fundamental frequency.

39
Losses in transformers
The most important of these losses is that due to eddy current losses in
the winding; it can be very large and consequently most calculation
models ignore the other harmonic induced losses.
The precise impact of a harmonic current on load loss depends on the
harmonic frequency and the way the transformer is designed.
In general, the eddy current loss increases by the square of the frequency
and the square of the load current. So, if the load current contained 20%
fifth harmonic, the eddy current loss due to the harmonic current
component would be 5 x 5 x 0.2 x 0.2 multiplied by the eddy current loss
at the fundamental frequency – meaning that the eddy current loss would
have doubled.
In a transformer that is heavily loaded with harmonic currents, the excess
loss can cause high temperature at some locations in the windings. This
can seriously reduce the life span of the transformer and even cause
immediate damage and sometimes fire. Specifically, the procedure of
reducing the maximum apparent power transferred by the transformer as
a consequence of harmonics, often called de-rating, can be used. To
estimate the required de-rating of the transformer, the load's de-rating
factor may be calculated. This method, used commonly in Europe, is to
estimate by how much a standard transformer should be de-rated so that
the total loss on harmonic load does not exceed the fundamental design
loss. This de-rating parameter is known as ‘factor K’.
The transformer de-rating factor is calculated according to the formula in
HD 538.3.S1. The factor K is given by:

Power Quality
40
(12)
where:
e the eddy current loss at the fundamental frequency divided by the
loss due to a DC current equal to the RMS value of the sinusoidal
current, both at reference temperature.
n the harmonic order
I the RMS value of the sinusoidal current including all harmonics
given by:
(13)
In the magnitude of the nth
harmonic
I1 the magnitude of the fundamental current
q exponential constant that is dependent on the type of winding and
frequency. Typical values are 1.7 for transformers with round rectangular
cross-section conductors in both windings and 1.5 for those with foil low
voltage windings.
(K-1) represents extra losses due to the harmonic load compared to
losses supplying a pure sinusoidal load.
The alternative method, proposed by Paola Verde et al in studies on
harmonics (equation 14) includes losses generated in transformer core.
5.0
2
2
1
2
1
1
⎥
⎥
⎦
⎤
⎢
⎢
⎣
⎡
⎟
⎟
⎠
⎞
⎜
⎜
⎝
⎛
⎟⎟
⎠
⎞
⎜⎜
⎝
⎛
⎟
⎠
⎞
⎜
⎝
⎛
+
+= ∑
=
=
Nn
n
nqh
I
I
n
I
I
e
e
K
( )
5.0
1
2
1
1
5.0
1
2
⎥
⎥
⎦
⎤
⎢
⎢
⎣
⎡
⎟⎟
⎠
⎞
⎜⎜
⎝
⎛
=⎟
⎠
⎞
⎜
⎝
⎛
= ∑∑
=
=
=
=
Nn
n
n
Nn
n
n
I
I
III

41
(14)
where:
PT losses of transformer due harmonic distortion (kW)
PFe fundamental frequency iron losses (kW)
Rn equivalent copper loss resistance of transformer at the nth
order
V1 fundamental component voltage (V)
Vn harmonic voltage of order n
In harmonic current of order n
m exponent with an assumed value m=2
n order of harmonic
Calculation of PT individually can be onerous. Instead, a simplified method
can be proposed based on the application of a simple algorithm by
regrouping transformers according their size.
Losses in generators
A similar method of calculation to that for transformers can be used.
According to ‘Harmonic costs on Distribution Power Systems’ by Roger
Bergeron, additional losses in generators and motors due to harmonic
components can be calculated using the following algorithm:
(15)
6,2
1
2 1
··3
nV
V
PRIP
m
n
Fen
n
nT ∑∑ ⎟⎟
⎠
⎞
⎜⎜
⎝
⎛
+=
∑=
⎟⎟
⎠
⎞
⎜⎜
⎝
⎛
⎟⎟
⎠
⎞
⎜⎜
⎝
⎛
+=
n
n
n
N
Nn
V
V
nV
V
PPP
2
2
1
2
1
1
1
35

Power Quality
42
Where:
Pn = total harmonic losses (kW)
PN = sinusoidal nominal losses (kW)
V1 = fundamental voltage
Vn = harmonic voltage of order n
Dielectric losses in capacitor banks
Losses (kW) in capacitors due to harmonic components can be calculated
using the following algorithm:
(16)
where:
Pd1 losses at fundamental frequency (W)
Pn losses due to harmonic n component (W)
V1 fundamental component voltage (V)
Vn harmonic voltage of order n
n order of harmonic
B3. Surges and transients
Most transients arise from the effects of lightning strikes or switching of
heavy or reactive loads. Because of the high frequencies involved, they
are considerably attenuated as they propagate through the network so
2
1 1
1
∑
∞
=
⎟⎟
⎠
⎞
⎜⎜
⎝
⎛
=
n
n
dn
V
V
nPP

43
that those occurring close to the point of interest will be much larger than
those originating further away. Protective devices in the network ensure
that transients are generally kept to a safe level and most problems arise
because the source of the transient is close to, or within, the installation.
The damage that results may be instantaneous, such as the catastrophic
failure of electrical plant or appliances, or the corruption of data within
computers or in network cabling, or it may be progressive with each event
doing a little more damage to insulation materials until catastrophic failure
of cables or capacitors occurs. The cost of replacing the failed equipment
and the cost of the downtime involved must be considered.
Surges and transients, even if not halting the production process, may still
be responsible for some process and equipment costs. Surge arresters
need maintenance to replace activated parts, production equipment,
protection equipment and controls need to be checked or reset. This can
be addressed by using the process and equipment costs approach.
B4. Voltage fluctuations and flicker
Voltage fluctuations in the power systems cause a number of harmful
effects of technical and ergonomic nature. Both kinds of effects may
involve additional costs in the production process. Some selected effects
of voltage fluctuation are described below. Also, frequently occurring,
irregular operation of contactors and relays should be mentioned, as their
economic effects could be damaging.
• Electric machines: Voltage fluctuations at the induction motor
terminals cause changes in torque and slip; as a consequence they
influence technical processes. In the worst cases they may lead to
excessive vibrations and therefore to a reduction of mechanical
strength and shortening the motor service life. Voltage fluctuations at

Power Quality
44
the terminals of synchronous motors and generators give rise to
hunting and premature wear of rotors; they also cause additional
torque, changes in power and increase in losses.
• Static rectifiers: A change of supply voltage in phase-controlled
rectifiers with DC side parameters control usually results in a lower
power factor and the generation of non-characteristic harmonics and
interharmonics. In the case of a drive braking in inverter mode, it can
result in a switching failure, with consequent damage to the system
components.
• Electrolysers: Equipment lifetime can be reduced and the efficiency
processes decreased and there is a risk of increased maintenance
and/or repair costs.
• Electroheat equipment: Efficiency is reduced – for example, due to
a longer melt time with the arc furnace - but it is noticeable only
when the magnitude of a voltage fluctuation is significant.
• Light sources: A change in the supply voltage magnitude results in
change of the luminous flux of a light source, known as flicker. It is a
subjective visual impression of unsteadiness of a light flux, whose
luminescence or spectral distribution fluctuates with time. The
perceived severity of flicker depends on the repetition rate of the
voltage fluctutions. Excessive flicker can cause migraine and is
responsible in some instances of the so-called ‘sick building
syndrome’.
The voltage of an electrical network varies continuously as equipment on
the network is switched. The voltage variation can be slow or fast,
depending on whether it is a cumulative variation of the total load supplied
by the grid, or an abrupt variation of a large load. The level of voltage

45
variations caused by switching of electrical equipment depends on the
network impedance. With increasing impedance, the level of voltage
variations will increase.
Cyclic variation of the voltage creates flicker, a perturbation which affects
the lighting equipment and creates a impression of unsteadiness of the
visual sensation.
Complaints about flicker are usually localised so routine measurement
campaigns are not often carried out. On the other hand, the available
data confirms that the long term and short term flicker levels are
commonly below those that might give rise to complaints. Values in
excess of the EN 50160 value do occur, however, especially in remote
areas due to the higher supply impedance.
Since flicker is very easily observed, diagnostic measurements are easily
targeted at affected areas. Given the immediate visibility of the
phenomenon and the severe human discomfort that can be caused, each
case of complaint must be taken very seriously. In order to prevent flicker
becoming a widespread problem, appropriate emission limitation is
essential, with due allowance for the cumulative effect across the network
levels.
To assess the adverse effect of flicker on staff work efficiency, the
following approach may be used:
F Flicker can cause migraine and can be responsible for so called
‘sick building syndrome’. The flicker sensation is measured as Pst
(ten minute measurement period) and Plt (two hour measurement
period); a value of 1 indicates that 50% of the population would
perceive flicker in a 60W tungsten bulb connected to such a supply.
Levels persistently close to or above 1 would be likely to cause

Power Quality
46
some reduction in manpower efficiency especially for visually
detailed operations. In such a case the labour cost will be higher
by Lex which is defined as nominal labour required to execute the
job multiplied by slowdown rate SDR. The indicated value of SDR
in some rooms of high flicker emissions values is 0.1 according to a
LBNA study[13].
(17)
where:
Lex is extra labour cost
SDR slowdown rate (suggested at 0.1)
B5. Unbalance
The sensitivity of electrical equipment to unbalance differs from one
appliance to another. A short overview of the most common problems is
given below:
• Induction machines: These are AC asynchronous machines with
internally induced rotating magnetic fields. The magnitude is
proportional to the amplitude of the direct and/or inverse
components. The rotational sense of the field of the inverse
component is opposite to the field of the direct component. Hence,
in the case of an unbalanced supply, the total rotating magnetic field
becomes ‘elliptical’ instead of circular. Induction machines face three
kinds of problems due to unbalance. Firstly, the machine cannot
produce its full torque as the inversely rotating magnetic field of the
negative-sequence system causes a negative braking torque that
has to be subtracted from the base torque due to the normal rotating
magnetic field. Secondly, the bearings may suffer mechanical
SDROLnL
i
ii
iex
×+×= ∑ )(

47
damage because of induced torque components at double system
frequency. Finally, the stator and, especially, the rotor are heated
excessively, possibly leading to faster thermal ageing. This heat is
caused by induction of significant currents by the fast rotating (in the
relative sense) inverse magnetic field, as seen by the rotor, and is
also accompanied by vibrations. To be able to deal with this extra
heating, the motor must be derated, which may require a machine of
a larger power rating to be installed. In general, a fully loaded motor
on a 2% unbalance supply is likely to suffer damage.
• Synchronous generators: Synchronous generators are AC
machines and one application is in local generation such as CHP
units. They exhibit phenomena similar to those described for
induction machines, but mainly suffer from excess heating. Special
care must be devoted to the design of stabilising damper windings
on the rotor, where the currents are induced by the indirect and
homopolar components.
• Capacity of transformers, cables and lines: The capacity of
transformers, cables and lines is reduced due to negative-sequence
components. The operational limit is in fact determined by the RMS
rating of the total current, being partially made up of ‘useless’ non-
direct sequence currents as well. This has to be considered when
setting trigger points of protection devices, operating on the total
current. The maximum capacity can be expressed by a derating
factor, to be supplied by the manufacturer, which can be used to
select a larger system, capable of handling the load.
• Transformers: Transformers subject to negative-sequence voltages
transform them in the same way as positive-sequence voltages. The
behaviour with respect to homopolar voltages depends on the
primary and secondary connections and, more particularly, the

Power Quality
48
presence of a neutral conductor. If, for instance, one side has a three
-phase four-wire connection, neutral currents can flow. If at the other
side the winding is delta-connected, the homopolar current is
transformed into a circulating (and heat-causing) current in the delta.
The associated homopolar magnetic flux passes through
constructional parts of the transformer causing parasitic losses in
parts such as the tank, sometimes requiring an additional derating.
• Electronic power converters: These are present in many devices
such as adjustable speed drives, PC power supplies, efficient lighting
and so on. They can produce additional, uncharacteristic, harmonics
although, in general, the total harmonic distortion remains more or
less constant. The design of passive filter banks dealing with these
harmonics must take this phenomenon into account.
The devices discussed above are obviously three-phase loads. Of course,
single-phase loads may also be affected by supply voltage variations
resulting from unbalance effects.
The table below shows typical extra losses from load unbalance as a
function of neutral current resulting from unbalance to average phase
current.
Table 1: Extra losses due to unbalance
Ratio of neutral current to
average phase current
% of additional losses from load unbalance
transformers Low voltage lines
0.5 6-8 40-50
1,0 15-20 70-140
1.5 35-50 140-260
2.0 70-90 200-500
3.0 150-200

49
The calculation of the economical effect of unbalance should be carried
out by assessing the cost of the consequences described above and/or
the cost of measures provided to mitigate them, most practically on annual
basis.
B6. Earthing and EMC
The use of a combined protective earth and neutral (PEN) conductor, as
used in a TN-C system, is not compatible with the principles of good
design.
The primary purpose of the protective conductor is to provide a path for
fault currents, leakage currents (at the fundamental frequency) and the
high frequency noise currents that arise from, for example, switched mode
power supplies via radio frequency interference (RFI) filters and second to
be a voltage reference for signal interfaces. In a TN-C system neutral
currents - including third harmonics - and earth currents mix in neutral
conductors, protective conductors and connected metalwork.
The magnitude of leakage currents varies around the installation. Since
the earth leakage current originates mainly from single-phase equipment
on each of the three phases, balanced components of the fundamental
from each phase will tend to cancel, so that the current in the protective
conductor may increase or decrease as circuits are combined along a
distribution system. The worst of these conditions are often encountered
in single-phase, final circuits supplying ICT equipment. Leakage currents
are harmless while flowing to earth, but can easily reach lethal levels if the
connection fails.
As microelectronic devices have developed they have become more
sensitive. Operating voltages and the energy required to switch logic
states have reduced; the immunity to voltage noise has generally

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50
decreased making these systems more sensitive to noise. The effect of
these trends has been offset by improvements in the system design to
improve noise immunity. These measures include the use of differential
interfaces and better software design that includes the use of error
detecting and correcting protocols on networks.
These techniques are very effective, but reduce network throughput by
sending redundant (error control) data and requiring re-transmission of
failed data packets. As the electrical noise increases, the error rate
increases, and throughput decreases until useful communication ceases
completely.
To the user it appears as if the system has suddenly failed, whereas in
fact it has merely degraded to the extent that the available recovery
mechanisms can no longer cope. If the electrical noise can be reduced to
a low enough level, the error rate will also reduce and data transmission
will again be possible. High noise levels reduce throughput by requiring
repeat transmission and further reduce efficiency. Clearly, network
efficiency is related to data processing efficiency, which is related to
business efficiency. As with many things, efficiency is worst when the
need is greatest and when the network is busy.
Consequently, reducing the level of electrical noise in the data processing
environment is crucial to increasing efficiency.
Despite the most serious economic consequences of lethal levels of
leakage currents, the cost of data loss, data corruption and cost of
mitigation should be assessed, most practically on an annual basis
Finally all PQ phenomena related costs can be expressed as:
(18)654321 BBBBBBB +++++=

51
C. Cost of postponed PQ effects
C1. Cost of ageing of equipment in power networks
Electrical power system components are subjected to different service
stresses (electrical, thermal, mechanical), which can lead to degradation
or ageing of electrical insulation - an irreversible process, resulting in
failure of the component.
For insulation in MV/LV power systems electrical and thermal stresses (i.e
voltage and temperature) are, in general, the most significant. Moreover,
the interaction between electrical and thermal stresses can lead to a
further increase of electrothermal ageing rate with respect to the effect of
these stresses applied separately, referred to as stress synergism. The
ageing rate can be accelerated by the increase of electrical and thermal
stress levels (with respect to the nominal service conditions), due, for
example, to voltage and current harmonics. Similar effects may result
from other disturbances such as unbalance or overvoltages.
When harmonic distortion is present, the equipment and component
models can take into account only thermal stress, leading to Arrhenius law
based models, or can also take electrical stresses into account, leading to
more complex life models.
Assuming that the useful life of an insulated device is determined by
thermal degradation of the insulation materials, the rate of degradation
can be represented by the well-known reaction rate equation of Arrhenius
when the absolute temperature of the materials is constant. From the
Arrhenius relationship, it has been demonstrated that the thermal loss of
life of the k-th component in a time period Tc characterised by
different operating conditions, each at given temperature and of given
duration, can be expressed as the summation of relative losses of life:
t
kLΔ

Power Quality
52
,
(18)
where q is the number of operating conditions during Tc; ti,k is the duration
of operating condition of the k-th component at constant temperature qi,k;
finally is the useful life of the kth
component at temperature qI,k, obtained
from Arrhenius model. The temperature of each component qi,k
can be determined by considering the heat balance relationships, in which
the losses at the fundamental and at the harmonics are the forcing terms.
When both thermal and electrical stresses have to be taken into account,
the procedure is similar, but the life models to be used in relation to 4.18
change for the electrothermal model. The relative loss of life of the MV/LV
power system component in the time period Tc, , can be again
expressed as the summation of fractional losses of life:
(19)
where is the life that the component would experience if
constant values of electric and thermal stresses a n d w e r e
continuously applied until failure.
In the literature, electrothermal models that explicitly account for the
effects of voltage and current harmonics for the most common equipment
and components of MV and LV systems can be found.
The reduction of equipment useful life can be quantified in economic
terms.
The calculation can be based on the thermal condition (determination of
temperature rise due to harmonic Joule losses) of equipment. Several
( )k,iθΛ
Let
kΔ
( )ii ,EL θ
iE
iθ
( )
=
=
∑
⎥
⎥
⎦
⎤
⎢
⎢
⎣
⎡q
1i k,i
k,it
k
t
L
θΛ
Δ
( )∑ ⎥
⎦
⎤
⎢
⎣
⎡q
1i ii
i
k
et
,EL
t
L
=
=
θ
Δ

53
formulas have been proposed for evaluating loss of equipment life,
considering the operating rather than the nominal conditions.
The operating temperature rise of the hottest point ( ) at operating
condition is evaluated by the following formula:
(20)
where :
= expected temperature rise of the hottest point under normal
operating conditions
= temperature rise of the hottest point caused by harmonics content
= operating power
= harmonics content
= Expected life span under polluted harmonics conditions
= Expected life span under nominal conditions
= Expected life span under operating conditions
There could be more loss of life at operating conditions than at rated
conditions because the life expectancy will be greater than Network
operators could lose more money in reduction of equipment useful life in
harmonics conditions when their e q u i p m e n t i s
operating below their nominal rating.
To determine the economic impact, the actual cost for the future
replacement of the equipment is needed . The time, t, used should be
chosen according to the normal lifetime of the equipment type:
hTΔ
O
O
h
h T
P
P
T Δ⋅≈Δ
OTΔ
hTΔ
OP
hP
ht
Nt
Ot
Ot Nt
( )⎭
⎬
⎫
⎩
⎨
⎧
Δ+
Δ
⎟
⎠
⎞
⎜
⎝
⎛
−
⋅= hOO
h
TTT
T
K
E
Oh ett

Power Quality
54
(21)
This is modified in the following form:
(22)
where:
is present value of future equipment replaced in sinusoidal (and
balanced) conditions
is actual cost for replacing the equipment
is expected life span of the actual equipment
The same formula is used to calculate the present cost for buying new
equipment in years representing the expected lifespan under
harmonics condition.
(23)
where:
is present cost for buying new equipment in years
representing the expected life span under harmonic (or other responsible
PQ disturbance) condition
is expected life span of the actual equipment under harmonics
condition
∑
++
+×−
=
=
n
t
t
t
tctb
ir
eCC
PV
0 )]1)(1[(
)1()(
O
O
t
t
E
E
ir
eC
PV
)]1)(1[(
)1(
++
+×
=
EC
EPV
Ot
ht
EhPV ht
ht
h
h
t
t
E
Eh
ir
eC
PV
)]1)(1[(
)1(
++
+×
=

55
The extra cost for the life span reduction due to harmonics will be given by
the following formula:
(24)
This procedure is generic and could be applied to the cost of life span
reduction for any kind of perturbation.
A global cost evaluation for loss life for distribution system equipment
could be performed by ordering equipment in categories representing the
kind of equipment and the nominal power in order to reduce the amount of
calculation. Time of the day and day of the year could be used to
evaluate different load levels (operating condition) and fluctuating ambient
temperature.
Bearing in mind the above, a possible simplified approach is to calculate
how much equipment lifetime has been shortened due to the presence of
such disturbances compared to the usual technical lifetime. Once the life
shortening effect is known, the cost of lifetime shortening CLTshort can be
expressed as:
(25)
where:
LTn technical lifetime under no stress conditions, years
LTd experienced lifetime under disturbance, years
DR annual depreciation value of equipment, in monetary units per year
IC replacement cost – removal and installation – of equipment which
is replaced before its technical lifetime, in monetary units
IC
LT
LTLT
DRLTLTCLT
d
dn
dnshort ×
−
+×−=
)(
)(
EhEELR PVPVC −=

Power Quality
56
C2. Mis-operation cost
The economical evaluation of mis-operation is the most complex and,
perhaps, the less explored, subject. Part of the complexity arises because
mis-operation may arise from many causes, making it difficult to ascribe
any instance of mis-operation to a particular cause. Also, some
disturbances, such as EMC, may corrupt data leading to problems that
become apparent at some point in the future. On the other hand, some
mis-operations, such as zero-crossing errors, are easily identified as
harmonic problems.
Generally, the economical impact of mis-operation involves financial
analysis of all the effects that mis-operation has on the process/activity
where the equipment is inserted. Typically, the mis-operation costs can
be estimated for existing systems whose duty cycle is well known.
Unexpected tripping of protection devices, for example, can stop a whole
industrial process. The cost of such an event includes several items, such
as the cost of downtime, the cost of restoration and repair and, where
applicable, the cost of replacement equipment. The findings of the
research work confirm that estimation of the mis-operation cost requires a
deep knowledge of:
• the equipment malfunctioning in the presence of harmonics or other
disturbances
• the process/activity where the equipment is installed
• the economical value of all the items involved in, or affected by, the
lower productivity
Looking at the problem of evaluating mis-operation costs from this point of
view, it is obviously analogous with the evaluation of the economic effects
of reduced productivity due to voltage dips.

57
Recently it has been proposed that the supply unreliability costs should be
included in the category of mis-operation. This interesting proposal is
based on the concept of sector customer damage and allows estimation of
the mis-operation cost as a function of well established figures in reliability
studies, such as sustained failure rate and momentary failure rate. The
model is particularly suitable for distributors who can use economic
metrics to choose the best solution at the planning stage.
Finally, the postponed PQ costs are
(26)
D. Conclusions
The approach presented here should facilitate economic data collection.
However the specificity of different business activities does not allow full
standardization of this process. Some costs cannot be easily qualified and
quantified under the categories presented here. In some cases it may
happen that a particular cost category or type exceeds by far other cost
categories and types so that detailed calculation is needed to ensure that
the detailed picture of all impacts is true.
The short checklist below describes how to check the completeness of the
methodology
• It needs to be established that PQ is the root cause. Check for the
best method of correlation between presence of PQ phenomena
(Taxonomy D) and PQ consequences (Taxonomy F). To assist with
this, use PQ measurement techniques and train staff to record
consequences as early as possible.
• Check the root causes of failures of equipment typically affected by
2CCLTC short
+=

Power Quality
58
PQ ( Taxonomy E) and compare with the correlation check drawn
from the previous step.
• Collect PQ cost data according to the methodology described here.
Sometimes, if some PQ cost data cannot be evaluated according to
the standard method, some simplifications may be necessary.
Investigate a variety of failure scenarios to determine how individual
equipment failures might impact on the process.
• Make sure that all information is true and complete. In particular, do
not ignore PQ costs which someone tries to hide or minimise,
claiming they have been made up without consequences. Also make
sure not to double count certain consequences.
• Check for completeness of data by examining this information with
the key persons in the company, particularly financial staff.
Investigate unexplained production costs, checking for hidden PQ
consequences.
• Do not ignore indirect consequences, particularly described under
A6. Also, check that the consequences have been limited only to the
site under investigation. Some direct and particularly indirect
consequences may influence other sites of the same company or
strategic business partners.
• Do not give up if some consequences seem difficult to quantify. Use
publicly available information, benchmarks, cases, or consult
experts.

59
IV. Structuring the data collection process
For the purpose of structuring the data collection process the following
taxonomy items are introduced.
A. Taxonomy
The following methodological components are introduced first to help
structuring the data collection process.
A.1. Critical sectors
which are in general PQ critical and demonstrate similar PQ sector
sensitivity, for which the methodology can be potentially targeted
CS1. Industrial sectors type uni-product / uni-process
(continuous manufacturing)
1. Food / Beverage (production processing and preserving, NACE 15)
2. Glass, ceramics, cement, lime and stone (NACE 26)
3. Metallurgy (NACE 27)
4. Pharmaceutical ( NACE 24.4)
5. Plastic and rubber (NACE 25)
6. Publishing, printing and reproduction of recorded media (NACE 22)
7. Pulp and Paper industry ( NACE 21)
8. Refineries, chemical industry (NACE 23.2, 24 except 24.4)
9. Semiconductor industry (NACE 32.1)
10. Textile (particularly preparation, spinning and manufacture NACE
17.1 and 17.5)

Power Quality
60
11.Wood and wood products (particularly production of sheets, boards
and panels NACE 20.2)
CS2. Industrial sectors type multi-product / multi-process
1. Automotive industry (NACE 34)
2. Continuous or highly automated or precision manufacturing – not
defined in other sectors - metal products (NACE: 28 fabricate metal
products - except structure work 28.1 , 30 - office equipment, 31-
electrical equipment, 32 – except 32.1 – RTV and telephony
electronics, 33 – medical equipment)
3. Manufacture of machinery (NACE 29 and 31)
CS3. Services sectors
1. Air transport (NACE2
62)
2. Database activities e.g. hosting services (NACE 72.4)
3. Financial intermediation (particularly central banking, but also other
general transactions, section J; NACE 65-67)
4. Hospitals (NACE 85.1)
5. Hotels (NACE 55.1)
6. Railways (NACE 60.1)
7. Telecommunications (NACE 64.2)
A.2. Cost categories
1. Process interruptions
2. Process slowdown
3. Equipment damage

61
4. Reduced lifetime and mis-operation (postponed costs)
5. Reduced energy efficiency - increased energy loss
6. Product quality
7. Worker productivity
8. Other indirect costs
A.3. Cost types - Operating consequences
1. WIP loss, often referred to as production loss or production damage.
This category includes this part of labour and material costs which
has been inevitably lost. This category has two major components -
labour and material cost.
2. Working capacity loss – basically quantifies efforts to make up this
part of production which can still be repaired or reused – WIP
recovery
3. Labour cost resulting from production outage – lost or extra paid
4. Other related costs when quantification using above mentioned
categories is not easily possible. These could be a process slow
down when it cannot reach its nominal efficiency including process
restart cost and additional maintenance costs. These include
process and process restart cost.
5. Equipment related costs, including equipment damage and
replacement costs, hire of temporary equipment, and running costs
of back up equipment
6. Indirect costs, e.g. consequences of late delivery such as penalties
to clients, extra compensation to personnel, cost of personnel or
equipment evacuation, extra insurance cost
7. Savings from unused resources (labour, energy, material).

Power Quality
62
A.4. PQ phenomena
1. Voltage dips and short interruptions
2. Harmonics (current and voltage)
3. Surges and transients
4. Flicker
5. Unbalance
6. Earthing and EMC
A.5. Equipment
as a PQ source and affected by PQ
1. Capacitors
2. Contacts and relays
3. Electric motors
4. Electronic equipment
5. Lighting equipment
6. Processing equipment
7. UPS uninterruptible power supplies
8. VSD and other static converters
9. Welding and smelting equipment
A.6. PQ consequences
1. Circuit breakers (including protective devices) nuisance tripping
2. Capacitor damage
3. Capacitors – dielectric loss

63
4. Computer lock up
5. Computers / other electronics damaged
6. Data loss
7. Electric shock
8. Lights flicker or dim
9. Loss of synchronisation of processing equipment
10. Motors / process equipment - malfunction or damage
11. Motors overheating – energy losses
12. Noise interference to telecom lines
13. Relays /contactors nuisance tripping
14. Transformers / cables overheating with related energy losses
15. Premature ageing and loss of reliability of electrical equipment
16. Overheating of neutral conductor in lines and transformers and
related problems (e.g. transient overvoltage, tripping of RCDs,
losses)
A.7. Solutions
1. Equipment immunity
2. Backup generator
3. Dynamic voltage restorers
4. Harmonic filter
5. Isolation transformers
6. Line conditioners or active filters
7. Multiple independent feeder

Power Quality
64
8. Oversizing equipment
9. Shielding and grounding
10. Site generation capable of substituting supply
11. Static transfer switches
12. Static VAR compensator
13. Surge protectors on key pieces of equipment
14. Uninterruptible power supply (UPS) devices
15. Voltage stabilisers
B. Executing data collection process – end user perspective
In general the outcome of PQ cost assessment should lead to calculation
of company annual PQ cost. This annual value is expressed as:
(27)
where i represents each type of process interruption in a given year and n
is the number of such process interruptions in a year.
The purpose of this publication, and particularly this section, is to help
calculation of A, B and C.
For calculation of A (process interruption cost) the following step-by-step
procedure can be recommended to estimate the cost of process
interruption for a single failure or to establish the cost profile for future PQ
cost estimates:
∑ ++×=
i
iienduser CBAnPQyear

65
• Step 1: Based on the assumptions mentioned above, evaluate the
total number of product variants, the total number of process
activities at any given instant and the maximum number of potential
failures among all process activities.
• Step 2: For each product variant, determine the associated
progressive cost components from A1 to A7 for each process
activity. Note: If for a particular process activity the maximum number
of failure scenarios is less than the maximum number of failure
scenarios in all process activities, then the cost components A2, A3,
A4 and A5 associated with failure scenarios assumes zero value.
Establish the cost related to component A6, particularly employees
tolerance for each failure instance of process activity. Establish
customer satisfaction and reputation retained level for instance of
non-delivery of a product variant in time. Finally calculate savings A7
due to failure scenarios.
• Step 3: Prepare a work schedule highlighting the active process
activities for a typical day for which process interruption cost profile
has to be established. This work schedule should include process
activities for various product variants and their simultaneous.
The proposed specification and division of sectors by Taxonomy A may
help an end user to focus economic data collection on certain aspects.
The proposed methodology suits the collection of cost data in ‘industrial -
uni-process’ sectors (Taxonomy A1). Most of processes are organised in
a series topology – Figure 3 – stream I, as a simple extreme. In such a
case, close attention should be paid to the calculation of process
interruption costs as all the processes are closely interdependent. In a
‘Just in time’ scenario, where there are no buffers in the process, one
process failure may stop the whole production line.

Power Quality
66
These sectors are particularly vulnerable to voltage dips and related
process interruptions
For sectors classified as ‘Industrial - multi-process’ (taxonomy A2)
production process is less often performed in continuous stream – Figure
3 – stream VI, as an extreme. In such case one process interruption may
not necessarily stop other processes. The consequences are limited to the
critical processes which are needed to make up for lost lead time of the
final product. The focus is therefore on extra cost (e.g. bonus extra time
labour cost) to recover lost or partly lost WIP (A1).
These sectors are vulnerable to voltage dips but also other phenomena
like harmonics and unbalance, transient and surges.
Figure 3: Six typical configurations considered for industrial processes
In the ‘Services’ sectors (Taxonomy A3) it can be difficult to distinguish the
root cause of process interruption, particularly in a commercial
environment where software, hardware or a PQ issue maybe responsible.
Once the root cause has been attributed to PQ, the consequences could
be:
I
II
III
IV
V
VI

67
- Loss of transactions in progress requiring data recovery, reprocessing
and repeated transmission. The standard data collection process
described here should be modified either using a mix of A1, A2 and A5
cost components.
- Process restart cost using A4 cost calculation
- Other costs, particularly lost revenues (missed opportunities) as result of
customer dissatisfaction and loss of reputation, but also such
consequences as penalties and other elements of A5 cost component.
Potential savings from A7 are usually negligible.
The alternative to the procedure described above is to use A3, the
process slow down method, to simply calculate business slow down rate.
In addition, due to lack of clear differentiation whether a process was
interrupted or not, all B - phenomena related cost components should be
used to check that nothing has been omitted. It also should be checked
whether any items have been double counted, particularly A5 (equipment
damage due to process interruption) and components B (equipment
damage due to occurrence of PQ disturbance).
Service sectors are relatively more vulnerable to the consequences of
long interruptions but PQ may still be the root cause of substantial
economic losses.
Taxonomy items B, C and D have been added here to systematise
the nomenclature used here.
Taxonomy items E and F have been added to facilitate the structuring of
data collection. Particularly when collecting process and equipment
related costs according to A3, A4, A5 and B1, B2, B3, these taxonomy
items can be used as checklists.

Power Quality
68
The economic data collection should serve a certain purpose. Knowledge
of the PQ economic impact can be used, for example, for calculation of
lowest life cycle business operation cost. Therefore, as well as from
collecting data on actual PQ cost it is advisable to also collect data on
mitigated or avoided PQ cost. This will also help further PQ mitigation
optimisation. Taxonomy items G can be helpful.
V. APPENDIX A Effectiveness of PQ solutions
A Power Quality Cost Survey performed by European Copper Institute
between 2004-2006 provided several observations about the application
of PQ solutions by end users. The companies covered by the study invest
yearly €297.5 million into various power quality solutions. The Figure 4
charts the proportion of load per sector covered by different types of
redundant or mitigatory solutions.
Figure 4: LPQI Survey, PQ solutions – installation coverage in %
The analysis of these solutions produced some interesting conclusions:
Many of the correlations between solutions (both investment and load

69
coverage) and PQ cost, the frequency of events or sensitivity to PQ
problems, which were thought to have been significant, have not been
proven. Another interpretation is that the data suggests that, perhaps due
to incorrect or insufficient measurement, many of the adopted solutions
adopted are in fact been poorly specified and thus not economically
optimised. Although outside the immediate scope of this survey, this area
could be another interesting area of investigation.
The Figure 5 shows a certain relationship between PQ investment and the
PQ Costs experienced. The slope suggests a positive relationship
between investment in PQ mitigation and the unmitigated costs of PQ.
[However, the relationship is not proven by the linear regression model;
RSq Linear = 0,036)]
Figure 5 : LPQI Survey, PQ cost / PQ solution investment relation
Although there is no significant correlation between solutions and real

Power Quality
70
cost, a strong correlation exists between investment in PQ solutions and
the hypothetical to real cost ratio. This is the ratio between the actual costs
experienced and the costs an organisation would have experienced if they
had suffered losses due to a PQ event.
This results in an indirect but clear link between solutions and (real)
consequences. See Figure 6.
Figure 6: LPQI Survey, Mitigated and unmitigated PQ cost per
unmitigated (real) PQ cost ratio as a function of PQ solution
investment
The following broad conclusions can be made:
- The increase in the ratio between hypothetical and real (mitigated/
unmitigated) cost is very visible in the case of UPS.
- One side effect of UPS use is the increased cost of harmonics. This can
be explained by suboptimal use of UPS systems that are based on
diffused small units without active power wave modulation, which in turn
generates significant input current distortion.

71
- There is a small but significant (positive) correlation between the number
of power lines and costs of short interruptions, while such a correlation is
insignificant as far as dips are concerned.
As far as preference of particular PQ solutions is concerned. Figure 7
presents the preferences of the two sectors, ‘Industry’ and ‘Services’.
- Both specify UPS most frequently.
- Back up generators, which prove to be most effective in case of long
interruptions, are dominant in Services.
- Harmonic mitigation through harmonic filters is reported at 45% to 65%
frequency
- For ‘Industry’ passive filters are almost three times more common than
active filters
- For ‘Services’, active filters are slightly more prevalent.
- In general ‘Services’ apply a higher frequency of different PQ solutions
than found in ‘Industry’.
• ‘Industry’ tends to favour less costly, more ad hoc solutions
whenever possible.

Collecting Economic Data in Power Quality Survey

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