Energy Audit of a Foundry Near Its Contract Demand
A small steel foundry has a contract demand of 500 kVA, a recorded maximum demand of 470 kVA, a monthly consumption of 96,000 kWh and a power factor of 0.82. The tariff has three parts: energy at ₹7.10/kWh, demand at ₹380/kVA of billing demand, and a power factor penalty of 0.5% of energy charges for every 0.01 by which the monthly average power factor falls below 0.90. Time-of-day charges add a surcharge of ₹1.30/kWh between 18:00 and 22:00 and give a rebate of ₹0.80/kWh between 22:00 and 06:00. The melting furnace accounts for about 45,000 kWh a month, of which roughly 30% can be moved out of the peak window without affecting production quality, provided the furnace is not allowed to cool fully. An installed capacitor bank costs ₹1,100/kVAr including switchgear and cabling. The plant is planning a 40 kW compressor addition next quarter. The manager's brief is simple: cut the bill without touching production.
1. Size a capacitor bank to bring the power factor to about 0.95 and calculate the monthly saving from reduced billing demand and avoided penalty, with the payback period.
Read the worked answer
Working power P = 470 × 0.82 = 385.4 kW. Reactive power Q = 470 × sin(acos 0.82) = 470 × 0.572 = 269.0 kVAr.
At target 0.95: Q_new = 385.4 × tan(acos 0.95) = 385.4 × 0.329 = 126.7 kVAr. Required compensation = 269.0 − 126.7 = 142.3 kVAr → select a standard 150 kVAr bank in steps (say 25 + 50 + 75 kVAr) for part-load switching.
After compensation: Q = 269.0 − 150 = 119.0 kVAr; S = √(385.4² + 119.0²) = 403.4 kVA; PF = 385.4/403.4 = 0.955.
Demand saving: (470 − 403.4) × ₹380 = 66.6 × 380 = ₹25,308/month. Penalty saving: PF improves from 0.82 to 0.955, so 8 penalty steps are eliminated (0.90 − 0.82 = 0.08 → 8 steps at 0.5% each = 4% of energy charges). 0.04 × 96,000 × 7.10 = ₹27,264/month. Total = ₹52,572/month, about ₹6.3 lakh a year.
Capex = 150 × 1,100 = ₹1.65 lakh. Simple payback = 1.65/0.5257 ≈ 3.1 months.
Caveat: do not leave the whole 150 kVAr connected at light load, or the plant will export reactive power at night and may attract a leading-power-factor penalty. Use the stepped bank with an automatic PF controller.
2. Evaluate the time-of-day load-shifting opportunity. Calculate the monthly benefit of moving 30% of furnace energy from peak to off-peak, and state the operational conditions that must hold.
Read the worked answer
Shiftable energy = 45,000 × 0.30 = 13,500 kWh/month.
Each shifted kWh avoids the ₹1.30 peak surcharge and earns the ₹0.80 off-peak rebate, so the benefit is the full spread, assuming the base energy charge is unchanged: 13,500 × (1.30 + 0.80) = 13,500 × 2.10 = ₹28,350/month, about ₹3.4 lakh a year.
This is comparable to the capacitor benefit and requires no capital beyond scheduling and possibly an insulated ladle or holding furnace.
Conditions that must hold:
- Metallurgical quality. The furnace must not cool fully between taps; holding at temperature may consume 10–20% of the shifted energy, which erodes but does not eliminate the saving. Recalculate with the holding energy before committing.
- Maximum demand. Off-peak operation must not create a new kVA peak; the demand charge follows the highest 15-minute average in the month, so the shifted load must be levelled, not stacked into a single hour.
- Manpower and safety. Night-shift supervision, crane operation and emergency response must be available; a furnace run without trained staff is an unacceptable risk.
- Contractual limits. Confirm the sanctioned load and the metering interval used for TOD billing, and confirm the discom's TOD slots, which vary by state and season.
This measure should be piloted for one month and the meter data compared before it is written into the audit report as an achieved saving.
3. The 40 kW compressor is about to be added. How does that change your recommendations, and what would you put in the audit report as the priority sequence?
Read the worked answer
The compressor adds about 40 kW (roughly 47 kVA at 0.85 PF) and would push demand from 470 kVA towards 517 kVA - over the 500 kVA contract demand, triggering penalty or disconnection. So the sequencing changes: the capacitor bank is no longer optional or purely financial, it is the measure that creates room for the compressor.
After 150 kVAr of compensation, demand falls to 403 kVA, leaving about 97 kVA of headroom; the compressor's 47 kVA fits within the contract demand with a margin of roughly 50 kVA. Without compensation, the compressor cannot be added without a contract-demand increase, which carries a permanent demand-charge cost and may require a transformer upgrade.
Priority sequence for the report:
- Capacitor bank, 150 kVAr in steps with automatic controller - 3-month payback, and it is the enabling measure for the compressor.
- Maximum-demand controller with priority tripping of non-critical loads (furnace auxiliaries, dust collection) to hold demand under 500 kVA, especially on night shift when the compressor and furnace may coincide.
- TOD shifting pilot, with holding-energy measurement before it is claimed as a saving.
- Compressor selection at IE4 or with VFD, and a leak survey, since compressed air is typically the least efficient utility in a foundry.
Also check harmonics: the furnace and any VFDs will load the capacitor bank with 5th and 7th harmonic currents. Specify a detuned reactor or a harmonic study before energising the bank, otherwise the capacitors will fail early and the audit's credibility with it.