Are Developing Economies at Risk Due to Power Quality Issues and Challenges?

Published On: Apr 05, 2014


The importance of high power quality (PQ) electricity supply has never been greater than it stands today, in fast growing electronics and IT heavy economies. Developed economies like that of USA and Europe, who have stable power supply, have recognized the PQ risk, and been working for its mitigation for last two decades. The developing economies, because of their continuing struggle with lack of robust utility infrastructure and 24×7 power supply are lagging in terms of their PQ expectations, and continue to absorb caused ‘economic losses’. This so called non-awareness of PQ business impact can be attributed to in-ability to differentiate power outage loss with poor PQ loss. Lets understand if developing economies could continue ignoring this risk, and at what costs.


Due to increasing and extensive application of power electronic equipments, industries and commercial establishments are frequently encountered with different types of PQ disturbances, also commonly referred as PQ phenomena. Some physical manifestations of the PQ problems are mentioned below (1):

Electrical Equipment Damage or Failure PQ phenomena category
Air Conditioning Premature compressor failure Voltage variation
Computerized reservation system Data loss / data error Voltage variation
Digital scale Unit damage Transient
Induction Motors Affects control systems Voltage sags and interruptions
Contactors and Relays Circuit breakdown Voltage sags and Voltage interruptions
Controllers Device damage Voltage sag
Energy Management Loss of control Transient

There are typically two types of Power Disturbances which can create economic costs for an entity:

  • Power Outages: An outage is a complete loss of power and results from either planned load shedding, or unplanned breakdowns, because of faults on the transmission or distribution electrical system.
  • Power Quality phenomena: A PQ phenomena occurs in case of any deviation in shape of voltage and current waveforms (from the ideal) and include events like voltage sags / swells, transients, interruptions (short and long), flickering or long term conditions such as harmonics, voltage imbalance, etc.

The commonly: electrical manifestation of PQ phenomena are voltage dips/sags/ swells/ fluctuation, interruptions (short and long), transients, etc. (See Figure 1).

Theeconomic manifestation: in terms of loss, could be due to damage of capital intensive appliances, use of redundant backup systems, use of inefficient operations, safety hazards, and/or negatively affected productivity/ quality/ market share.

It is studied that roughly70% of the PQ phenomena are originated at the business premises (caused because of loading), and remaining 30% comes from the T&D network side(3). Along this line, below table gives some key causes for PQ disturbances:

External Causes Internal Causes
  • Lightning
  • Storms
  • Underground cable damage
  • Overhead network damage
  • Unexpected, no easy anticipation
  • Transformer overloading
  • Insulation breakdown
  • Conductor overload
  • Unbalanced loading
  • Harmonic contamination

The70:30 ratio would mean, that if an establishment could manage its internal caused PQ related problems, it can avoid the associated economic losses. It is estimated that PQ upgrading cost is about 1% of the infrastructure value in most cases. Also, ‘cost of the cure’ is less than 10% of the ‘cost of the problem’, as revealed in 2007 PQ survey conducted by Leonardo Power Quality Initiative (LPQI), targeting European region, with inputs from 16 industrial sectors (see detailed report reference below).If this be right, then it indicates, that contingency and loss provisions could atleast be reduced to one tenth.


A PQ survey by Leonardo Power Quality Initiative (LPQI) in Europe in 2007 indicated an annual loss due to PQ phenomena, of more than 150 billion, which is about 4% of the total annual turnover of the surveyed 15+ key sectors (4).The study comprised of 62 face-to-face surveys, carried out in 8 European countries across 16 sectors (See detailed report – European Power Quality Survey Report) . Some relevant key findings of the survey were:

  • ‘Industry ‘sectors accounted for over 90% of this loss. The share of ‘Services’ sectors, although significant by itself, was lesser than ‘Industry’ sector.
  • Dips and short interruptions account for almost 60% of the overall cost/loss to ‘Industry’ sector.
  • Lack of analysis and measurement tools among power critical industries to be able to know the causes for interruptions in their operations.

A similar survey by Electric Power Research Institute (EPRI) conducted in USA in 2000, reported that across all business sectors, the US economy is losing between 119 to 188 billion USD due to Power disturbances, caused because of power outage and PQ phenomena. The study covered 1000 samples under three broad categories (i) Digital Economy (ii) Continuous Process Manufacturing and (iii) Fabrication and Essential Services. (See detailed report – The Cost Of Power Disturbances to Industrial And Digital Economy Companies).

Key findings of the study were:

  • PQ losses are average 12% of overall Power Disturbance losses. It ranges from 2% to 21% for different business sectors.
  • 4% of surveyed companies reported annual PQ costs representing 10% or more of their annual revenue.


There is comparatively limited knowledge and awareness of PQ issues and losses in Developing countries.

A recent survey (5) conducted by International Copper Association Southeast Asia in 2012 in three countries (Indonesia, Thailand, Vietnam) indicate that inadequate PQ mitigation and prevention systems causing a serious reduction in industrial performance. The study covered 124 surveys across 13 different sectors (combination of industry and service sectors).The results show that an overall economic impact is estimated over 1 billion USD per annum in the three countries (See detailed report – Power Quality Loss Survey Report)

Some of the key findings of the study were:

  • Voltage dips and long interruptions contribute over 90% of overall economic costs having significant impacts on both sectors.
  • Power supply in Southeast Asia is not sufficiently reliable, with on average three times more long interruptions than in the European Union.
  • No facility has a dedicated PQ monitoring system for the PQ parameters, which prevents any thorough diagnosis.

Another PQ Loss survey conducted in Shanghai, China, in 2011 by International Copper Alliance (ICA) shows that the annual economic cost related to PQ phenomena is about 0.472 billion USD in 7 industry sectors, which is about 0.1% of total annual output of these sectors.

In India, there has been no elaborate and systematic study that establishes the economic loss suffered by the Industries due to PQ phenomena. One study undertaken by Wartsila India, in 2009 estimated that India suffers a staggering loss of INR 1000 Billion, because of power disturbances, primarily because of outages. It also estimated that the industries are spending close to INR 300 Billion annually to operate inefficient power back-ups, Gensets and Inverters (2). A recent joint study on ‘Impact of PQ in Indian Industries’ in 2012 undertaken by IIT Delhi with Asia Power Quality Initiative (APQI) concluded as follows:

“Almost all the industries suffer due to various power quality problems. In fact, many of the industries are not even aware of various PQ problems like harmonics, flickers etc. They do not even possess equipment to measure this irregularity in power quality. It is a must to educate and create awareness among industries regarding power quality. This calls for Bureau of Indian Standards (BIS) taking a firm and bold step to introduce power quality standards that are suited for our country. For this, academicians, industrialists, consumers, utilities and regulatory bodies should come together and have several thorough brainstorming sessions. This will create a healthy and reliable power grid and utility in our country enhancing productivity and GDP growth”

A recent discussion of 77th International Electro-technical Commission (IEC) on ‘Challenges to Power Quality’, organized by Bureau of Indian Standards (BIS) in 2013concluded that appropriate statistical indices for monitoring power quality should be standardized to provide a framework for guidance and facilitating regulation by various countries.


Though with mix results, yet it is clear that PQ issues cannot be ignored, even by the developing countries. Also, there is likely strong correlation between Energy Efficiency (EE) and PQ. A simple example will be of Capacitor banks, which are used on demand side to control and subsidize harmonics and transients, improve Power factor, and reduce electricity bill. While EE has already caught industry attention, it will be savvy to build improved PQ awareness and services together with EE audits and ESCO services. It will be worthwhile to review and further specify PQ parameters, together with EE rating for standard industrial equipments and energy management solutions. The existing Energy Auditor and ESCO companies can add PQ audits and further strengthen performance guarantees in their services portfolio. Let us be EE efficient but not at the cost of being PQ inefficient.

Stay tune for further blogs and webinars, and building of knowledge on PQ topic. We will like to get your comments, further facts, case studies, experience share, to build vibrant community for knowledge and network share. Please take time to share your comments or suggestions through the Contact Us link or send feedback on



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