Does a capacitor bank save electricity units at a Punjab foundry? What does the Bureau of Energy Efficiency report count?

No. The Bureau of Energy Efficiency (BEE) report for Batala, Jalandhar and Ludhiana foundries says lifting power factor from 0.96 to 0.99 saves no electricity units. It counts a 0.75% rebate on the bill: rupees (Rs) 38,700 a year for 83 kilovolt-amperes reactive (kVAR) of capacitors, Rs 16,675 all in.

Power factor in plain words

Picture a cup of tea with froth on top. The tea is the power that does work: it melts metal and turns shafts. The froth is power that only sloshes back and forth in the wires. The supply line has to carry the whole cup, froth included. Power factor says how much of the cup is tea. A reading of 1.00 is all tea.

A capacitor bank is a box that supplies the froth locally, so the supply line carries less of it. The electricity meter counts the tea. If your bill is in kilowatt hours (kWh), the units on it do not move. If your bill is in kilovolt-ampere hours (kVAh), the billed units do fall, but the energy you use and your carbon figure for electricity do not.

What the report counts

• Load 550 kilowatts, 10 hours a day, 300 days. Power factor now 0.96, proposed 0.99.
• Extra capacitors needed: 83 kVAR, costed at Rs 125 a kVAR, so Rs 10,375. With Rs 1,300 of tax and Rs 5,000 of other cost the total is Rs 16,675.
• Savings: the board's incentive for power factor above 0.90 rises as the factor rises. The report reads it as a 0.75% rebate on a bill of Rs 4.3 lakh a month. A lakh is 100,000. That is Rs 51.6 lakh a year x 0.75% = Rs 38,700.
• Payback is printed as 6 months. Rs 16,675 / Rs 38,700 = 0.43 years, about 5 months.
• It states plainly that the improvement will not save electricity consumption. Only the bill falls.

Checks, and what the report says about carbon

The tan figures behind the 82: 550 x (0.2917 minus 0.1425) = 82 kVAR.

• The report's 83 kVAR checks out: the sum comes to about 82. The report assumes 550 kilowatts and a lift from 0.96 to 0.99.
• The report's section on environmental benefit says the lower demand on the power plant leads to less fuel burnt and less greenhouse gas. It prints no figure, and its table of key results has no carbon line. Its own savings section says electricity use does not change.
• Scope 2 means the carbon from electricity you buy. It is built from the units on your bill (kWh) times the grid factor, which is 0.675 kilograms of carbon dioxide per kWh for the 2025-26 financial year. On a kWh bill, if the units do not change, nor does the figure. The page on power factor and emissions explains kVAh bills and the small loss effect inside your own wiring.
• Section 4.1.2 says other costs are Rs 2300 lakh. The cost table shows Rs 6,300 (Rs 1,300 plus Rs 5,000), so that line is a misprint.
• For units with induction furnaces, the report says the power factor has to be maintained above 0.95.

What to check on your own bill

1. Find the power factor printed on your last six bills. If it is already above the incentive threshold, ask what the next step pays.
2. Read the current tariff order for the exact incentive and penalty bands. The report quotes the Punjab State Electricity Board's rule at the time: an incentive above 0.90 and a penalty below 0.80.
3. Ask the capacitor supplier how the bank will be switched in steps, so it does not over-correct at low load.

Example: the report's method on your own bill

• Monthly bill Rs 2.5 lakh, so Rs 30 lakh a year (example numbers)
• If your tariff pays a 0.5% rebate at the new power factor: 30 lakh x 0.005 = Rs 15,000 a year
• Capacitors: a 40 kilowatt load moved from 0.96 to 0.99 needs about 40 x 0.149 = 6 kVAR, which at the report's Rs 125 a kVAR is about Rs 750 plus fitting
• Electricity units: unchanged. Scope 2 at 0.675 kilograms of carbon dioxide per kWh: unchanged

The bill, the 0.5% and the 40 kilowatt step are examples. The tariff has changed since the report; use the rebate your current order gives.

What Senseible does here

Senseible reads fuel invoices and electricity bills into monthly records, so the units on each bill are on file and you can see that units stay level after a capacitor bank goes in. It reads power factor where the bill prints it and does not change it.

• Does power factor correction reduce emissions
• Power factor correction on an Alwar oil mill
• Your carbon number for buyers and banks

Sources: BEE, Detailed project report: power factor improvement by capacitor bank, Batala, Jalandhar and Ludhiana foundry cluster (SAMEEEKSHA)

Last reviewed 2026-11-07. The report is from BEE's Small and Medium Enterprises programme and quotes the Punjab State Electricity Board rules of its time. Tariff incentives and penalties change by order; read your current tariff before you rely on the rebate.