Optimizing Energy Use through Power Factor

According to SENER, Mexico’s electricity consumption in 2012 was 7.2% higher than in 2010. Given that the First Governance Report of President Enrique Peña Nieto stated that the industrial tariff price had increased 191.4% between 2000 and June 2013, energy efficiency has become a pressing matter for Mexican companies. Keeping energy costs low has become essential to continue being competitive in the global market. “The most important thing to keep in mind is that energy efficiency can be optimized from the outset if equipment with the proper power factor and high efficiency is selected. The fact is that, if companies maintain their old or obsolete equipment, they will consume more energy,” says Víctor Manuel Hernández, Director General of IICE.

ICE has provided consulting services and equipment to Mexican industries since 2007, with the aim of helping them minimize energy consumption. “We observe and analyze our clients’ situations, in order to recommend the best equipment that will suit their needs. Our philosophy is to give a good and efficient service to our clients,” Hernández says. Siemens, Schneider Electric and ABB are some of the big names that compete with IICE, but Hernández explains that his company offers added value through its customer service, from pre-sale to post-sale. “We are in close contact with our clients throughout the whole process. We look after their needs, we give them advice, and we suggest the best product. After the equipment we recommend has been installed, we keep track of their energy consumption, too,” states Hernández.

When IICE explains to a client that they should change the way they consumes energy, and that this requires special equipment, doing so is often viewed as an unaffordable, avoidable expense. “We have to show them a cost benefit analysis, emphasizing that they will reduce their CFE bills, as well as calculate how many months it will take before they see a return on investment. The problem is that many companies do not have the budget to make the initial investment,” Hernández says. He considers that CFE could help the industry and finance such equipment through FIDE (Electrical Energy Saving Trust Fund). He believes that doing so would help to improve the quality of energy.

There are many ways to optimize energy consumption. “A good place to start searching for opportunities is the power factor, which is a ratio of energy usage. In the industrial sector, CFE charges for the use of energy as well as demand, by stating that consumption has to be at least 90% of the ratio of energy usage. If the consumption is less than 90%, CFE applies a fine that the company has to pay, but there is also a bonus if the consumption exceeds 90%. By increasing its power factor and keeping it higher than 95%, a company can therefore reap economic benefits. One benefit for the companies is that they will stop paying the fines imposed by CFE for low power factors, and might even be able to get a bonus,” explains Hernández. “The fine can be up to 120% of the energy charge and the demand charge. In comparison, the bonus can be just 2.5% of the same. Nevertheless, it can represent a huge benefit for the companies.” Another issue that has to be taken into account is harmonics. Nowadays systems are automated, which helps reduce production time and costs, but generates harmonics. These harmonics can damage electrical equipment. IICE offers a solution for that problem: a capacitor bank and a harmonic filter that combine to reduce harmonics. “Companies need to understand that they need a specialist that pays attention, not only to the power factor but also to harmonics. This is where we come in,” says Hernández.

When working with a client, IICE carries out a series of tests to diagnose existing problems and identify areas of opportunity. Afterwards, the company presents a cost benefit analysis and electrical solutions to the client and advises which equipment is needed to correct the power factor. “We take care of our customers,” Hernández says. “They want to see results once the equipment is installed. Our job is not just to sell the equipment but also to stay with the client, so that if there is a downturn in the power factor, we know why it happened and what to do about it.” IICE works intensely to communicate the benefits that might be seen by industries if the correct power factor is established. “It does not just bring benefits for the companies, we also see this as bringing benefits for the future, when it might not be so expensive to consume energy,” explains Hernández