Inverter Drive Systems Limited
Unit 5, Denman Court, Merlin Way,
Quarry Hill Industrial Estate,
Ilkeston, Derbyshire, DE7 4RA
Tel: 0115 9441036, Fax: 0115 9441372

An Official

Drives Distributor

Related Information

This page includes issues that are related to the use of Variable Speed Drives (Inverters) for your information only. We have included such subjects as the Climate Change Levy, the Enhanced Capital Allowance scheme and harmonic distortion issues including the EA recommendation G5/4. Should you have any further questions regarding the following, or if you would like us to include any other related subject, then please contact us.

Contents:

1. The Climate Change Levy.

2. The Enhanced Capital Allowance scheme.

3. The ABB 'Pay As You Save' scheme.

3. Harmonic Distortion of the supply network.

4. The Electricity Authority Harmonic Distortion Recommendation G5/4.

Many industrial companies have had a very nasty shock when they received their first electricity bill for April 2001.  They will have found that they have to pay 0.43p more with every kWh of power that they have consumed since 1 April. This means a 10-15% addition to a companies electricity bill.  At the same time, their bills for other fuels have risen, although less dramatically – 0.15p/kWh for coal and gas and 0.07p/kWh for LPG.

The reasons for these increases are the Government’s Climate Change Levy (CCL), which has finally been implemented, following a lengthy gestation period.  The origins of the Levy date back to the Kyoto summit conference held in Japan in 1997, at which the world’s leaders agreed that drastic measures were needed to curtail the emission of ‘greenhouse gases’ thought to be responsible for global warming.

The leaders agreed to cut emissions of a “basket” of six gases – the most important of which is carbon dioxide (CO₂)  - by 5.2% of 1990 levels by the period 2008-2012.  The European Union went further by declaring that it would cut emissions of greenhouse gases by an average of 8% below the 1990 levels by this time.   National targets vary widely across the EU from Portugal, which will be allow to increase it emissions to 27%, to Luxembourg which has pledged to cut its emissions by 28%.   The UK is aiming for a 12.5% reduction in its output of greenhouse gases.

Almost every country in Europe is introducing some form of energy tax to encourage more efficient use of energy.  In the UK, the Government estimates that its Climate Change Levy will cut CO₂ emissions by 2.5m tonnes by the year 2010.  It will also generate an estimated annual revenue of around £1,000m.

The aim of the levy is to discourage profligate uses of energy.  It will affect almost every non-domestic user of energy.   There are a few exemptions including, for example, renewable forms of energy such as wind and solar power, ‘good quality’ CHP (combined heat and power) schemes, and electrolysis plants.  The horticulture sector will be given a 50% discount on levy payments for 5 years.

One reasons for imposing the levy is to move the burden of taxation from ‘good’ things such as jobs, to ‘bad’ things, such as pollution.

The extra cost of the Levy will be offset to an extent by a 0.3% reduction in employers’ National Insurance contributions.  The government estimates that across the UK commercial sector as a whole, the net effect will be ‘revenue neutral’ – with the increased energy costs being balanced by the lower NI contributions.

However, some sectors, such as the manufacturing industry, with high energy bills will be hit harder than others, such as the service sector, with relatively low energy demands and large numbers of staff.

The Government is attempting to redress this imbalance in several ways.   First, it has been negotiating with ten energy intensive sectors of industry – including producers of aluminium, steel, paper, chemicals and food and drink – for them to reduce voluntarily the amount of energy the consume.  In return, companies in these sectors will receive an 80% reduction in their levy payments.  These agreements will be monitored closely and if two-yearly targets are not met, the companies will have to pay the levy in full.

A second method of alleviating energy bills will be for companies to ‘trade’ their emissions of greenhouse gases under a scheme developed by the Emissions Trading Group, led by the CBI (Confederation of British Industry).  A pilot version of this very complicated scheme is due to start running a year from now.

The Government has also established a fund worth £50m:

• To provide energy efficiency audits and advice for small and medium sized enterprises (SME’s);

INVERTER DRIVE SYSTEMS CAN PERFORM AN ENERGY EFFICIENCY AUDIT OF YOUR SITE ‘FREE-OF-CHARGE’ TO DETERMINE WHERE YOU COULD BE SAVING ENERGY.

• To promote the development of new sources of renewable energy; and
• To encourage research, development and take up of low-carbon technologies and energy-saving measures.

Conclusion

There still appears to be widespread ignorance in the UK industry and commerce about the Levy and its potential impact on their operations.  Among those that are aware of the CCL, there have been complaints that the Levy will make it even more difficult for UK manufacturers to compete internationally, and threats that they may be forced to move their businesses to countries that are less concerned with the environment.

The government points out that most European governments are introducing similar taxes (although France and Belgium have yet to implement their levies). Before the UK’s ECA scheme can be put into practice, the European Union will have to approve that it does not breach agreements on state aid to industry, but the Inland Revenue does not expect any problems in gaining this approval.

If the Climate Change Levy achieves little else, it should raise awareness of the potential for saving energy costs and the role that technologies such as VARIABLE SPEED DRIVES can play in making these savings.

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Another initiative to encourage the adoption of energy saving equipment is a tax incentive that will allow companies to write off 100% of the cost of certain types of equipment in the year that they buy the equipment against corporation tax.  The scheme, known as Enhanced Capital Allowances (ECA), is expected to cost the Exchequer up to £100m in the 2001-2002 tax year.

Eight categories of equipment have been chosen to be eligible for ECA’s, including refrigeration, boilers and lighting equipment.  VARIABLE SPEED DRIVES AND ENERGY-EFFICIENT MOTORS are the two key types of motion control equipment that qualify for the Allowances.

Details of the criteria for eligible equipment are published on a Web site at www.eca.gov.uk, but soft starts and ‘energy optimisers’ are excluded, initially at least.

Following the publication of these criteria, manufacturers have applied to have their products included in the UK Energy Technology List, which has just been published.  This list includes eligible products and their manufacturers.  The ECA’s   apply to the new equipment bought after this publish date.

Manufacturers have applied to DETR (Department of Environment, Transport and the Regions) to have their equipment included in the list and to lobby for new categories of equipment to be added to the list.  If the DETR turns down a manufacturers application for equipment to be included on the list, the manufacturer can resubmit the application with more evident backing their claim.

Although it will be relatively easy to determine whether a stand-alone item of equipment qualifies for the ECA, what happens when that equipment is built into a larger machine?  Is it still eligible for the Allowance and, if so, does the machine as a whole qualify for an ECA or just the embedded drive or motor?

The answer seems to be that the enhanced allowances will be available on the energy-saving elements in the system.  A list of average costs for the energy-saving components has been drawn up and published, and the ECA’s will be available on these costs.

A further complication affects applications such as heating and ventilating systems where the allowance will apply if the systems are fixtures not part of a building.

The A to Z of ECA’s

As the name suggests, the Enhanced Capital Allowance scheme is based on an existing one, which allows companies to write off the cost of assets over a period of time to compensate for their depreciation.  Depreciation itself is not an allowable tax deduction because it represents a capital cost, whereas tax is charged on income.  So capital allowances provide a form of relief that is deducted when determining the taxable profit of a business.

Usually, a percentage of the cost is written off in the first year, with the balance carried over to subsequent years where it continues to be written off on a reducing basis.  The rates of the allowance depend on the size of the firm, with smaller companies receiving a 40% allowance in the first year, and 25% in subsequent years.  Larger enterprises receive a fixed 25% allowance.

Capital Allowances are available for various forms of expenditure on items including industrial buildings and scientific research.  One eligible category is “machinery and plant” and the new ECA applies items to this category.

The energy efficiency ECA will allow 100% of the cost of an eligible piece of equipment to be written off against tax for the period in which the expenditure in incurred.

To qualify for capital allowances, the claimant must have:

• Incurred capital expenditure on plant of machinery for use in a trade.

• Incurred the expenditure wholly and exclusively for the purpose of that trade; and

• Must own the plant or machinery.

Leased equipment does not qualify, but items bought on hire purchase are deemed to ‘belong’ to the purchasers.

There is little doubt what machinery means.  “If it has cogs or wheels or levers or other moving parts, it will have the characteristics of a machine,” explains Chris Orchard, a technical advisor in the Inland Revenue.  “We tend to apply what we refer to as the elephant test – it may not be easy for the layman to describe in detail, but you know one when you see one,”

But ‘plant’ is more of a problem.  There is no legal definition of the term, despite several court cases on the topic.  “An asset may be plant in the hands of one person, but not in another’s,” says Orchard.   “The question depends on the particular use of the particular asset in the particular trade.”

So for example, a mezzanine floor used as a temporary, removable shelf in a warehouse, would be classed as plant, the same floor left permanently in place to provide extra office space would be regarded as part of the premises and would not be eligible for capital allowances.

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Inverter Drive Systems view the Climate Change Levy and the associated Enhanced Capital Allowance scheme as an opportunity to boost ABB Variable Speed Drive sales.

Although variable speed drives (or Inverters) can reduce energy costs substantially in many applications, the vast majority of the 10 million motors used in British industry are not controlled by a VSD.  In 1997, these motors, with a combined capacity of some 70GW, consumed about 130TWh, at a cost of around £6,600m.

Almost half this energy (45%) is used to power the motors that drive pumps and fans.  But most of the motors run at a constant speed, with variable output frequently being achieved by inefficient, imprecise methods such as throttling or damping.  Further energy is wasted by using oversized motors that are often rounded up to the next standard frame size.

It is estimated that the cost of running such systems can be 50% more that it needs to be.  Not surprisingly, the Enhanced Capital Allowance scheme will target fan and pump applications in particular.

Using a variable speed drive to achieve a 20% reduction in fan motor speed can cut energy costs by 50% and pay for itself in 2 years or less.  Despite this, the uptake of AC inverter systems is scandalously low. The three key reasons for this are:

• The lack of resources at the engineering level, and an attitude that the job of engineers is to keep the wheels turning, not to cut running costs

• The fact that finance departments don’t understand the technologies or know the potential for energy saving; and
• The reluctance of British business to use capital budgets to reduce revenue budgets.

One way that ABB are attempting to overcome these obstacles is through a scheme called Pay-As-You-Save which allows companies to spread payments for AC drives over 12 monthly instalments.  The Inland Revenue recognises this as a Hire Purchase scheme and will, therefore, allow buyers to claim ECAs.  Although take-up of the scheme so far has been limited, ABB’s UK general manager Steve Ruddell expects demand to rise as firms realise the impact of CCL.

“People will wake up in a cold sweat”, he predicts.  They will want to install energy efficient equipment on their largest items of plant but may not have to capital budget to do so.  Pay-As-You-Save will allow them to spread the cost over a year.

Another way the manufacturers are raising awareness of the energy saving abilities of VSD’s is through software that helps to calculate the potential savings.  ABB, for example, produce packages called ‘Pump Save’ and ‘Fan Save’ that estimate energy savings based on usage data. These can be supplied free-of-charge from Inverter Drive Systems.

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Historically, harmonics were mainly caused by magnetisation non-linearity, for example, in transformers. Nowadays, power electronics based equipment is the main source of harmonic pollution in the low-voltage network.

Examples of such equipment include Variable Speed Drives, UPS’s, Welders, PC’s, Printers etc. In general, the semiconductor switches in this equipment conduct only during a fraction of the fundamental period. This is how such equipment can obtain their main properties regarding energy saving, dynamic performance and flexibility of control. However, as a result a discontinuous current containing a considerable amount of distortion is drawn from the supply.

Many types of equipment found in modern electrical installations can be considered as harmonic current sources. The currents are injected into the supply system distorting the supply voltage. This then gives rise to harmonic currents at other locations, even when at these locations, no harmonics generating equipment is present.

Also, a resonance phenomena is introduced by the interaction between the inductive supply system and power factor correction capacitor banks. This amplifies the harmonic distortion when the resonance occurs around harmonic frequencies.

Problems Caused by Harmonics

Harmonic pollution causes a number of problems. A first effect is the increase of the RMS value and the peak value of the distorted waveform. This increase in the RMS value leads to increased heating of the electrical equipment.

Furthermore, circuit breakers may trip due to higher thermal or instantaneous levels. Also, fuses may blow and capacitors may be damaged. KWh meters may give false readings. The winding and iron losses of motors increase and they may experience perturbing torque’s on the shaft. Sensitive electronic equipment may be damaged. Equipment which uses the supply voltage as a reference may not be able to synchronise properly and either apply wrong firing pulses to switching elements or switch off. Interference with electronic communications equipment may occur. Also, in installations with a neutral, zero phase sequence harmonics may give rise to excessive neutral currents.

Conclusions

Overall, it may be concluded that an excessive amount of harmonics leads to a premature ageing of the electrical installation. This is an important motivation for taking action against harmonics.

The harmonic pollution may only affect equipment in the polluting plant but may also disturb equipment in other plants. In order to limit this disturbance, maximum allowable distortion limits have been defined in standards and recommendations (see Electricity Authority UK recomendation G5/4 below). Also, the International Electro-technical Commission (IEC) has issued a technical report (IEC 1000-3-6) which outlines assessment procedures to determine whether distorting loads may be connected to the supply system.

In many cases the regulations impose a limit for the total harmonic distortion (THD) of the voltage or current present at the point of common coupling (PCC). The PCC is the location at which the plant is connected to the public power system (generally at the primary of the main transformer). The utilities may impose penalties on users, which introduce too much harmonic distortion on the supply. This is another motivation for taking action against harmonics.

Power Quality & Harmonic Analysis Survey

Inverter Drive Systems can offer a harmonic distortion survey to determine any problems with the quality of the incoming supply or the extent of the harmonic distortion being created within your site. We have a state-of-the-art software package on a laptop that connects via a power meter directly to the mains supply. This software is able to measure simultaneously harmonic orders up to the 23rd harmonic.

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March 2001 saw the introduction of new regulations designed to combat the effects of supply harmonics

EA Recommendation G5/4, which affects every consumer connected to the public electricity supply, proposes reduced levels of mains harmonic current distortion (particularly the fifth harmonic).  Users of variable speed drives are especially affected as the fifth harmonic content of the input current to an unfiltered inverter can be as high as 60%, which could be well outside the G5/4 limits.

‘Planning Levels’ limit the overall voltage distortion at each level in a network and are applied at the ‘Point of Common Connection’ (PCC) where the supply is shared with other users.  The consumer must ensure that the appropriate procedures to agree connection of new loads are obtained; otherwise they could find themselves having to implement costly remedial measures in the event of a problem/complaint from other users.  G5/4 defines three stages of assessment, which increase in complexity.

Stage 1.

This concerns only 230V single phase and 400V three phase supplies.  In principle, any equipment or combination of items of equipment, under 16A input current, which meets Harmonised European Standard EN 61000-3-2, may be connected without further assessment. This standard basically covers domestic equipment – drives over 1kVA are considered to be professional equipment and are accepted with no limits.

For multiple items of equipment, a table is presented to limit the aggregate harmonic currents permitted.  To calculate the resulting level, the arithmetic sum of all the harmonics for a number of drives is taken.   If the connection is not acceptable at Stage 1 or is at medium voltage (6.6kV to 22kV), it is possible to undertake a Stage 2 assessment.  It is not clear within G5/4 what procedure is applicable for a new 400V connection when Stage 1 current limits have been exceeded.

Stage 2.

If the total converter load is lower than 130kVA (6-pulse diode rectifier) or 250kVA (12-pulse), for a medium voltage (MV) PCC, then there is no need for further assessment.  For converter loads greater than above, Stage 2 connection is still permissible after an assessment to determine whether the harmonic currents imposed on the MV supply are within the limits set within Stage 2 of G5/4.  Otherwise, the network operator must measure the existing background network voltage distortion.  This measurement is preferably based on a minimum of seven days recording, in order to capture the peak distortion.

The overall voltage distortion value is calculated as 95% of the accumulated % time values (that is for a reading taken every ten minutes), then % time would be equal to % x ten minutes, or % minutes.  Adding all these % time values over the measurement period yields a grand total of  % minutes.  The 95% value is thus 0.95 x grand value divided by the total measuring time.

If the harmonic currents due to the load exceed the limits defined in G5/4 and/or the 95% value of existing distortion exceeds 75% of the appropriate MV planning level, then the contribution to the overall level of distortion, due to the connection of the new load, will have to be determined and the resultant value assessed.  Should the resultant overall level and/or the level of 5th harmonic remain within the planning levels, then connection may be agreed.

Stage 3.

If the levels of harmonics exceed those for Stage 2, or if the point of common coupling is at 33kV or over, then a different and substantially more complex procedure is called for.  The method adopted will need to be established between the supply utility, the consumer and the manufacturer.

Notching.

This is a new requirement within G5/4 consistent with the compatibility limits set out in the standards IEC 61000-2-2 and 61000-2-12.  This requires that the notch ‘depth’ should not exceed 15% of the fundamental peak voltage.  Notching occurs with all rectifier equipment and to achieve the 15% limit, ac line impedance is necessary (ac line chokes for inverters or single transformer supply).  Generally, such equipment will meet this requirement if ac line chokes are fitted (inverters with only dc chokes will not be compliant), and the ratio of supply transformer kVA to fault level (MVA) is greater than ten.

For Stages 2 and 3, measurements need to be taken of the actual levels of distortion on a network – these usually require access to the supply utility’s equipment.  The standard for making measurements is currently the harmonised European Standard EN 61000-4-7.

How can Inverter Drive Systems help you?

IDS can provide on-site harmonic distortion surveys to examine existing background levels prior to the installation of further Variable Speed Drives and also post installation to ensure that the G5/4 planning levels have not been exceeded.

To comply with G5/4 these surveys are for a minimum of 7 days with a sample time of 10 minutes minimum. A comprehensive report is then created together with calculations for the addition of Variable Speed Drives to the existing background distortion levels.

These calculations allow us to determine which is the best combination of inverters and/or filters to ensure that the requirements of G5/4 are not breached. This may include 6-pulse drives, 12-pulse drives, re-generative drives, active filtration or supply phase shift modifications.

G5/4 Harmonic Surveys may be performed on either the Low Voltage (240 or 415V, single or three phase) or the Medium Voltage (1.1kV, 3.3kV, 6.6kV, 11kV & 33kV three phase) depending upon the PCC (Point of Common Coupling).

General G5/4 advice is provided free-of-charge.  For a 7-day survey contact us for a price which also includes 3 copies of the final report, technical advice and recommendations.

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