Why is compensation necessary?
Compensation is not an "extra"; it is a fundamental engineering practice that prevents reactive energy charges, protects your panel and makes the power you draw from the grid efficient. On this page we explain why.
What is reactive power?
The apparent power (kVA) drawn from the grid has two components: active power (kW), which does useful work, and reactive power (kVAr), which inductive loads such as motors, transformers and fluorescent ballasts draw to create a magnetic field but which does no work. As the angle φ between these two components grows, the power factor (cos φ) drops and the grid has to carry more current to do the same work.
What exactly happens in your facility without compensation?
The effect of a low power factor is not limited to a single item; it creates cost in four different places, from the bill to equipment life.
Direct penalty charge
Under EPDK regulations, for connections below 50 kVA a penalty applies if inductive reactive energy exceeds 33% of active energy or capacitive reactive energy exceeds 20%. At 50 kVA and above, these limits fall to 20% (inductive) and 15% (capacitive).
(Approximate cos φ equivalents: 33% → 0.95 · 20% → 0.98 · 15% → 0.99)
Overloaded infrastructure
A low power factor means higher current for the same work; cable, panel and transformer capacity is consumed unnecessarily. This leads to larger (and more expensive) equipment being chosen when new investment is needed.
Voltage drop and heating
High reactive current causes extra heating and voltage drop in conductors and transformer windings. This shortens equipment life and increases the risk of failure.
Loss of efficiency
A low power factor means drawing more energy from the grid for the same work; by reducing reactive current, compensation lowers electrical losses and improves efficiency. Without instant measurement this loss goes unnoticed; the size of the problem is only seen when the bill arrives.
How does compensation close this gap?
Capacitor steps supply the reactive power that inductive loads need locally instead of from the grid. The reactive power demand on the grid is then reduced, the angle φ narrows and the power factor (cos φ) improves toward 1.
Measurement
The energy analyzer detects the current cos φ value and the load profile in real time.
Automatic step control
The reactive power control relay switches capacitor steps in or out as needed, keeping the target cos φ at all times.
Switching
Capacitor steps are switched in and out through contactor groups.
How does compensation pay for itself?
As the reactive penalty is reduced or removed, the investment starts to be recovered; this saving continues as long as the system operates properly and the regulations do not change.
The penalty risk is reduced
As long as the system operates properly and the power factor stays within the limits set by the regulations in force, no reactive energy charge appears on the bill; the outcome depends on operating conditions and current regulations.
Capacity is freed up
Because transformers and cables no longer carry unnecessary reactive current, they can work closer to the real production/operating capacity.
Equipment life is extended
Reduced heating and voltage drop let switchgear and the transformer work trouble-free for longer.
How is the penalty calculated?
Although the reactive penalty looks complicated, it is actually based on a simple ratio in three steps.
The ratio is calculated
The total reactive energy (kVArh) drawn in the billing period is divided by the total active energy (kWh) drawn in the same period. Inductive and capacitive reactive energy are evaluated separately.
Compared with the limit
The resulting ratio is compared with the limit that applies to your connection power (below 50 kVA: 33% inductive / 20% capacitive; above 50 kVA: 20% inductive / 15% capacitive).
Billed if the limit is exceeded
When the limit is exceeded, the reactive energy is multiplied by the unit price set by EPDK and shown on the bill as "Reactive Energy Charge". Details of application may change with regulations.
Where should you look on your bill?
The reactive penalty is often paid unnoticed because it appears as a small item within the total amount. Checking three places is enough.
The "Reactive Energy Charge" line
It is listed as a separate item below the total active energy charge on your bill. If there is an amount on this line, the limit was exceeded in that period.
Meter readings
On your smart meter or the distribution company's OSOS (remote meter reading) portal you can see inductive and capacitive reactive energy (kVArh) separately from active energy (kWh).
Reactive power control relay
The relay display on the panel shows the current cos φ value and step status instantly and warns before a penalty arises.