Question: A 1-MVA substation operates at full load at 0.7 power factor. It is desired to improve the power factor to 0.95 by installing capacitors. Assume

A 1-MVA substation operates at full load at 0.7 power factor. It is desired to improve the power factor to 0.95 by installing capacitors. Assume that new substation and facilities cost $120 per kVA installed, and capacitors cost $30 per kVA installed.
(a) Calculate the cost of capacitors needed.
(b) Find the savings in substation capacity released.
(c) Are capacitors economical for releasing the amount of substation capacity?

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