You could put the bank anywhere on the system as shown (between the transformer and load and not only at Points A, B, and C) and achieve unity power factor for the system. The utility company will perceive this power system as having a unity power factor no matter where it is located on the distribution line as long as it's sized correctly to deliver the proper amount of KVAR.
However, optimum efficiency and economics will be achieved if the capacitor bank is located as close to the load as possible.
It should be noted that since the load is linear, no harmonics are present and we need not consider the special problems when harmonics are "on the loose" in a power system.
(Capacitor banks tend to attract harmonics due to their lower impedance with increasing frequency, and the placement of banks can aggravate the situation due to possible parallel and series resonances in the system's overall impedance. Because the explanation for this gets a little lengthy, you really have to attend the seminar to get a good overview of this matter concerning resonances.)
However, the basic rule of thumb is to locate the bank as close as possible to the load.
The reason for this is because when you improve power factor, you can reduce the total line current to the load and therefore you reduce the total losses in the line conductor and decrease the voltage drop in the line. This decrease in voltage drop will only occur if you locate the capacitor close to the load, as explained below.
Assume the load is a motor. A motor uses KW to perform work. It uses KVAR to magnetize its coil windings. (We will refer to the magnetic requirements of the motor's windings as the motor's "inductance". It is this inductance that utilizes the KVAR.)
The motor load draws a line current that has two components. The first component is the amperage that supplies the KW to the load, so that the motor can perform work such as lifting an object. The second part supplies the amperage to provide the load with KVAR which in the case of the motor is the power necessary to energize the magnetic fields in the motor's windings. Together the two amounts of current supply the total KVA to the load.
Normally the system generator or transformer supplies all this current. But when a capacitor is used to correct the power factor, the capacitor supplies the KVAR reactive current component to the load. The capacitor is, in effect, a reactive power generator. (Remember, the capacitor is a storer of energy. The capacitor stores reactive energy in its electric field when it charges up, and releases it when it discharges.)
The generator (or transformer) must still supply the load's KW requirements.
The reactive current component is now supplied by the capacitor and not the generator. By moving the capacitor closer to the load, the reactive current does not have to travel as far through the line conductors to get to the load.
If the capacitor is placed at the load, the reactive current only needs to travel through a short distance (e.g. the lead length of connecting wire) to get to the load. Since this reactive current component no longer travels through the conductor line from the generator to the load, it does not travel through the impedances in the line conductor.
Since this reactive current no longer flows through the line impedances, there is less heating of the line, less losses (in the form of heat), and less voltage drop across these in - line impedances (which reduces the overall voltage drop from generator to load).
The KW current component is all that the generator has to supply to the motor. Therefore the generator now runs at unity power factor and allows the capacitor to supply the KVAR requirement of the motor's inductive windings.
The energy "contained" in the KVAR current component is transferred back and forth between the capacitor and the motor 2 times for every voltage sine wave cycle (i.e. at 120 times a second).
This reactive energy is never consumed by either the capacitor or the motor. (NOTE: The KW energy, on the other hand, performs real work and is totally consumed.)
Rather, the reactive energy is only "BORROWED" half of the time by the capacitor and half of the time by the motor. The energy is used to charge the AC electric field of the capacitor and to energize and create the AC magnetic fields contained in the motor's windings.
A capacitor absorbs this energy from the power system and stores this energy in its electric field when it charges up (120 times a second). The capacitor releases this energy back into the power when it discharges (120 times a second).
The motor's inductance absorbs the reactive energy from the power system and stores this energy in its windings' magnetic fields when the fields are expanding (120 times a second). The inductance releases this energy back into the power system when the windings magnetic fields are collapsing (120 times a second).
The secret is that when the motor's inductance requires reactive energy to expand its magnetic field, the capacitor discharges to supply the energy. And when the magnetic field in the motor's inductive windings is collapsing and returning energy to the system, the capacitor uses this energy to charge up.
So the capacitance in the capacitor and the inductance in the motor's windings "slinky" this reactive energy back and forth 120 times a second, each supplying the others needs. The reactive current of the capacitor is 180 degrees out of phase with the reactive current of the inductance. When one is giving, the other is taking and vice versa.
Again, the reactive energy is never consumed (except for some small and usually insignificant losses); it is only borrowed. The generator needs to supply the original reactive KVAR energy only once when the system is first energized. After that, this amount of energy is simply transferred back and forth between inductance and capacitance.
Power Factor is a measurement of how much of the KVA is actually in the form of KW. The advantage of a high power factor is that line currents can be reduced which will in turn reduce voltage drop and decrease line losses. This saves money. It also means that since equipment such as transformers will supply only KW, the KVA rating of the equipment can be reduced, or alternatively, more load can be added to the system without purchasing larger equipment.
The KVA rating of a transformer is based on the transformers ability to supply power either all in KW or all in KVAR or in a combination of both. Drawing more than rated KVA from a transformer is easily done, but the transformer's life will be reduced due to increasing heat which destroys the transformer's winding insulation.
By increasing the power factor, all of a transformer's KVA can be utilized to supply KW in order to perform useful work rather than to supply KVAR just to energize electric and magnetic fields.
Increasing the power factor seen by the transformer creates "room" on the transformer for adding more load. Room can also be created on circuit breakers. Since line current is reduced by increasing power factor, load can be added to the system without upgrading the breaker to a larger size.
In our seminar, we will discuss why and how capacitors act like reactive current generators and we will show you the differences between leading and lagging KVAR's. Other aspects such as calculating the power factor, sizing the capacitor bank, advantages of high power factors, and how inductance and capacitance store energy are explored.