The Costs of Poor Power Quality

Productivity is the key to survival in today’s globally competitive environment. When you think about the basic inputs to production—time, labor, and materials—you can see there isn’t much room for optimization. You have 24 hours per day, labor is costly, and you don’t have much choice in materials. Thus, every company must use automation to gain more output from the same inputs, or perish.

So, we rely on automation, which in turn relies on clean power. Power quality problems can cause processes and equipment to malfunction or shut down. And the consequences can range from excessive energy costs to complete work stoppage. Obviously, power quality is critical.

Where do power quality problems come from? Most originate inside the facility. They may be due to problems with:

  • Installation—improper grounding, improper routing, or undersized distribution.
  • Operation—equipment operated outside of design parameters.
  • Mitigation—improper shielding or lack of power factor correction.
  • Maintenance—deteriorated cable insulation or grounding connections.

Even perfectly installed and maintained equipment in a perfectly designed facility can introduce power quality problems as it ages.

Power quality problems can also originate from outside the facility. We live with the threat of unpredictable outages, voltage sags, and power surges. Obviously, there’s a cost here. How do you quantify it?

Costs of Poor Power Quality

Measuring power quality costs

Power quality problems make their effects felt in three general areas: downtime, equipment problems, and energy costs.


To quantify system downtime costs, you need to know two things:

  1. The revenue per hour your system produces.
  2. The costs of production.

Also, consider the business process. Is it a continuous, fully utilized process (e.g., a refinery)? Must your product be consumed when produced (e.g., a power plant)? Can customers instantly switch to an alternative if the product is not available (e.g., a credit card)? If the answer to any of these questions is yes, then lost revenue is difficult or impossible to recover.

Equipment problems

Exact costs are hard to quantify, because you are dealing with many variables. Did that motor really fail from excess harmonics, or was there some other cause? Is Line Three producing scrap because variations in the power supply are causing variations in machine performance? To get the correct answers, you need to do two things:

  1. Troubleshoot to the root cause.
  2. Determine the actual costs.

Energy costs

To reduce your power bill, you need to record consumption patterns and adjust the system and load timing to reduce one or more of the following.

  1. Actual power (kWh) usage
  2. Power factor penalties
  3. A peak demand charge structure

Until now, capturing the cost of energy waste caused by power quality issues was a task for the most expert engineers. The cost of waste could only be calculated by serious number crunching, a direct measurement of the waste and monetization was not possible. With the patented algorithms used in the Fluke 430 Series II products, waste caused by common power quality issues such as harmonics and unbalance can be measured directly. By inputting the cost of energy in to the instrument the cost is directly calculated.

You can reduce power usage by eliminating inefficiencies in your distribution system. Inefficiency sources include:

  • High neutral currents due to unbalanced loads and triplen harmonics.
  • Heavily loaded transformers, especially those serving non-linear loads.
  • Old motors, old drives, and other motor-related issues.
  • Highly distorted power, which may cause excessive heating in the power system.

You can avoid power factor penalties by correcting for power factor. Generally this involves installing correction capacitors. But, first correct for distortion on the system—capacitors can present low impedance to harmonics and installing inappropriate PF correction can result in resonance or burned out capacitors. Consult a power quality engineer before correcting PF if harmonics are present.

You can reduce peak demand charges by managing peakloading. Unfortunately, many people overlook a major component of this cost—the effect of poor power quality on peak power usage—and thus underestimate their overpayments. To determine the real costs of peakloading, you need to know three things:

  1. “Normal” power usage
  2. “Clean power” power usage
  3. Peak-loading charge structure

By eliminating the power quality problems, you reduce the size of the peak demands and the base from which they start. By using load management, you control when specific equipment operates and thus how the loads “stack on top of each other.” Now your building averages 515 kWh and your peak-load drops to 650 kWh. But, you add load management to move some loads around and now fewer loads stack on top of each other at once— your new peak-load rarely goes beyond 595 kWh.

In conclusion, it’s important to determine the costs of prevention and remediation—and then compare those to the costs of poor power quality. This comparison will allow you to justify the investment needed to fix the power quality problems. Because this should be an ongoing effort, use the right tools so you can do your own power quality testing and monitoring rather than outsourcing it. Today, it’s surprisingly affordable—and it will always cost less than downtime.

Purchase: FLUKE-435-II Power Quality and Energy Analyzer
The Costs of Poor Power Quality Brochure