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A Cost-Benefit Analysis for Applying Static VAR

Compensator to Electric Arc Furnaces

Abstract— Electric Arc furnace (EAF) represents one of the most This paper intends to present an integrated simulation
intensive and disturbing loads in the electric power systems. Utilities modeling of EAF and SVC networks instead of using single valued
are concerned about the power quality issues such load can cause piece-wise linear V-I characteristics of the arc furnace load, a
and try to take precautions to minimize their effects on power dynamic and multi-valued V-I characteristics are obtained by
network at Point of Common Coupling (PCC). In this paper,
using corresponding differential equations [11]. The output of
mitigation of such power quality issues can be shown to be also
beneficial to industrial plant from a techno-economic point of view. dynamic model developed is modulated with low frequency chaos
One of the most important mitigation solutions is the Static VAR signal to produce the arc furnace model. The model developed is
Compensator (SVC). This study presents the results of applying SVC connected to actual power system model to study the voltage
in Main Receiving Substation (MRSS) of Ezz Al-Dekheila (EZDK) fluctuation.
Steel Company and the cost–benefit analysis from such application. The paper is organized as follows; Section II introduces the
modeling of EAF. Section III discusses the SVC theory of
Keywords-component— Electric Arc Furnace, Static VAR operation. Section IV describes the Case Study for Integrated
Compensator (SVC), Power Quality, Harmonics, Flickers, Cost-
Model of EAF and SVC. Finally, the conclusion is presented in
Benefit Analysis
section V.
Electric Arc Furnace (EAF) is a widely used device in
metallurgical and processing industries. It is a nonlinear time A. Arc Furnace Operation
varying load, which can cause many problems to the power system Electric arc furnaces are available in both alternating current
quality such as unbalance, harmonics, inter-harmonics and voltage (AC) and Direct current (DC) models. A transformer directly
flicker. Thus, study of electric arc furnaces has potential benefits energizes furnace electrodes in a high current circuit in arc
for both customers and utilities. An accurate modeling of an EAF furnaces, whereas dc furnaces employ a controlled rectifier to
will help in dealing with the problems caused by its operation [1]. supply dc to the furnace electrodes. Arc furnace operation may be
Minimization of the undesirable impact of EAFs can improve classified into stages, depending on the status of the melt and the
electric efficiency and reduce power fluctuations in the system. time lapse from the initial energizing of the unit.
The description of an arc furnace load depends on the Consider the case of the processing of scrap steel in an AC
following parameters: arc voltage, arc current and arc length EAF. During the melting period, pieces of steel create momentary
(which is determined by the position of the electrodes). Based on short circuits on the secondary side of the furnace transformer.
the study of above essential parameters, many models are set up These load changes affect the arc characteristics, causing
for the purpose of harmonic and flicker analysis. In general, they fluctuations of current. The current fluctuations cause variations in
may be classified as follows, a) Time domain analysis method reactive power, which cause a momentary voltage drop or flicker,
(Characteristic Method, Time Domain Equivalent Nonlinear both at the supply bus and at nearby buses in the interconnected
Circuit Method), and b) Frequency Domain analysis method system. The arc currents are more uniform during the refining
(Harmonic Voltage Source Model, Harmonic domain Solution of period and result in less impact on the power quality of the system.
nonlinear differential equation). Each method has its own Arc furnaces also create harmonic load currents and asynchronous
advantages and disadvantages. Comparison and commendation of spectral components. Harmonics represent an important power
different arc furnace models were presented in [2-6]. quality issue, because they may cause undesirable operating
Most of the existing models make some kinds of conditions such as excess losses in transformers, mal-operation of
approximation on the characteristic of arc. There have been two drive controllers etc. Fig.1 shows typical installation of EAF.
general approaches to the problem of arc furnace modeling:
stochastic and chaotic. In most of the previous studies, stochastic
ideas are used to capture the periodic, nonlinear, and time-varying
behavior of arc furnaces, where the arc furnace load is modeled as
a voltage source. The model is based on representation of the V-I
characteristics using sinusoidal variations of arc resistance and
band limited white noise.
Research study shows that, the electrical fluctuations in the arc
furnace voltage have proven to be chaotic in nature. Some chaos-
based models reported have been applied to simulate ac and dc arc Fig. 1. Typical installation of EAF
furnaces [7-10].
Fig.2 shows actual and piece-wise linear approximation of V- The power balance equation for the arc is
I characteristic of an Arc Furnace Load where Vig is the ignition
voltage and Vex is the extinguish voltage. P1 + P2 = P3 (1)
P1 represents the power transmitted in the form of heat to the
external environment.
P2 represents the power, which increases the internal energy in
the arc, and which therefore affects its radius.
P3 represents the total power developed in the arc and
converted into heat. The above equation can be represented in the
form of differential equation [13] of the arc:
dr K3
K1 r n + K 2 r = i2 (2)
dt rm+2
Fig. 2. Actual and piece-wise linear approximation of V-I characteristic of an Arc
Furnace Load
B. Chaotic Dynamics in Electric Arc Furnaces r is the arc radius and is chosen as the state variable instead of
Chaos, also known as the strange attractor, does not generally taking arc resistance or conductance.
have an accepted precise mathematical definition. Usually from a k1, k2 and k3 are constants relative to EAF melting conditions.
practical viewpoint, it can be defined as the bounded steady-state
behavior that does not fall into the categories of the other three m is the variations of the resistivity with temperature.
steady-state behaviors i.e. the equilibrium points, periodic n is the conditions of cooling.
solutions, and quasi-periodic solutions. The equilibrium points are
zero dimensional and periodic solutions are one-dimensional, The arc voltage is given by:
where as strange attractors are more complex and their dimension i
is a fraction. A chaotic system is a deterministic system that v= (3)
exhibits random movement and it is a nonlinear system that
exhibits extreme sensitivity in the state trajectory with respect to Where
the initial conditions. It has been observed that the electric
fluctuations in an arc furnace are chaotic in nature [12]. g is defined as arc conductance and is given by the following
The chaotic component of the arc furnace voltage is obtained
from the chaotic circuit of Chua [10]. To exhibit chaos, the circuit g= (4)
consisting of resistors capacitors and inductors has to contain the
following: It is possible to represent the different stages of the arcing
(i) At least one locally active reactor process by simply modifying the parameters of m and n. The
complete set of combination of these parameters for different
(ii) At least one nonlinear element. stages of electric arc can be found in [10].
(iii) At least three energy storage elements
Chua’s circuit satisfies the above requirements.
C. Matlab Simulink Model of EAF
The development of general dynamic arc model in the form of
a differential equation is based on the principle of conservation of
energy. The approach is fundamentally different from those
methods where some empirical relation is used to represent the
electrical arc. In the dynamic model, such relations which are
implicit for steady state conditions are not pre-defined and give
result for different conditions depending on both frequency and
current magnitude. Here the arc furnace is modeled in two stages.
First dynamic electric arc modeling is done and the obtained arc
voltage is then modulated with chaotic signal to produce final arc
furnace model.
The state space equations of the above-mentioned system III. SVC THEORY OF OPERATION
would be in this case: By definition, capacitors generate and reactors (inductors)
Ro =
i2 -
R (5) absorb reactive power when connected to an ac power source.
K2 R3 K2 They have been used with mechanical switches for (coarsely)
controlled VAR generation and absorption since the early days of
V=i* 2 (6) ac power transmission. Continuously variable VAR generation or
Implementing the above equations using Simulink blockset as absorption for dynamic system compensation was originally
shown in Fig.3, taking the parameters K1= 3000; K2 = 1; K3 = 1; provided by .over- or under-excited rotating synchronous
n=2; m= 0 to simulate melting stages, the dynamic voltage/current machines and, later, by saturating reactors in conjunction with
characteristic of the electric arc are modeled as shown in Fig.4. fixed capacitors.
High power, line-commutated thyristors in conjunction with
capacitors and reactors have been employed in various circuit
configurations to produce variable reactive output. These in effect
provide a variable shunt impedance by synchronously switching
shunt capacitors and/or reactors "in" and "out" of the network as
shown in Fig.6

Fig. 3 MATLAB/ Simulink model of electric Arc Furnace

Fig. 6 SVC Components

The SVC is used to regulate voltage on a system. When system

voltage is low, the SVC generates reactive power (SVC capacitive).
Fig. 4 Dynamic Characteristics of EAF When system voltage is high, it absorbs reactive power (SVC
inductive) as shown in Fig.7.
This model is then combined with the band limit white noise
to create the chaotic nature of the arc furnace voltage and current
parameters as shown in the control structure of EAF as shown in

Fig. 5.Control Structure of Arc Furnace

Fig. 7 SVC Interaction with Power Network Dynamics

A. Power Factor
As can be seen on the below trend that the voltage during
SVC#1 out of Service can reach 30.4 kV as a minimum value.
While when SVC #1 is on service, the voltage minimum value
is 32.75 kV.

Fig. 11. Power and Voltage profile for one heat EAF#2 when SVC#1 is On

Based on the design values of the EAF, the following cases

are estimated for SMP#1 operation, and are shown in Table I.

TABLE I. Operation Parameters with and without SVC

Operation SVC In Service SVC out of Service
Tap 10 10
Name Plate Voltage Ratio 33/0.721 33/0.721
Actual Voltage Ratio 33/0.721 30.9/0.675
Fig. 8. Power and Voltage profile for EAF#2 on 17.11.15 P.F 0.9 0.78
Active Power
63 54.6
On-TAP Time (min.)* 48.3 55.7
# Heats
91.79 82
(Turn Around +delays 14.4 min.)
* kwh/ton ∗ EAF capacity (tons) ∗ 60 (min)
On Tap time (min.) =
𝐴𝑐𝑡𝑖𝑣𝑒 𝑃𝑜𝑤𝑒𝑟 (𝑘𝑊)∗𝐸𝐴𝐹 𝑒𝑓𝑓𝑖𝑐𝑖𝑒𝑛𝑐𝑦∗𝐸𝐴𝐹 𝐸𝑞𝑢𝑖.𝐴𝑣𝑎𝑖𝑙𝑎𝑏𝑖𝑙𝑖𝑡𝑦

The above table shows 4 additional heats for 4 EAF’s due to on

tap time saving with SVC in operation.

Table II shows the actual EAF’s performance with and without

SVC for the same operating conditions:

TABLE II. Actual Performance with and without SVC

Fig. 9. Power and Voltage profile for EAF#2 on 21.11.15 Comparison Planned Without SVC in With SVC in
Point of View Figures Operation Operation
In addition, as can be seen below for the integrated P.F along Tapping Yield % 87.3 86.3 87.3
the heat is about 0.78 and over 0.9 when SVC#1 is on Availability % 96.5 96.6 96.5
DRI % 70 64.8 65.6
On Tap Time
58.56 59.7 54.7
Turn Around
Time 11.8 12.8 12.7
Delays Time
2.6 2.6 3.5
EAF Power
565 573.42 562.6
# Heats 77 77 80
In addition to the reduction in the monthly electric bill due to
power factor improvement to a value of more than 0.98, which
Fig. 10. Power and Voltage profile for one heat EAF#1 when SVC#1 is Off
save around 500,000 $ /year.
B. Payback Period, Net Present Value (NPV) & Internal Rate of iii) Internal Rate of Return (IRR)
Return (IRR) Study Internal rate of return (IRR) is the interest rate at which the net
Several evaluation methods can be used according to the present value of all the cash flows (both positive and negative)
company’s internal evaluation criteria for investment. The most from a project or investment equal zero. Internal rate of return is
familiar methods are [14-15]: used to evaluate the attractiveness of a project or investment. If
i) Payback time (PBT) the IRR of a new project exceeds a company’s required rate of
The payback time represents the amount of time that it takes for a return, that project is desirable. If IRR falls below the required
project to recover its initial cost. The use of the PBT as a capital rate of return, the project should be rejected.
budgeting decision rule specifies that all independent projects A general rule of thumb is that the IRR value cannot be derived
with a PBT less than a specified number of years should be analytically. Instead, IRR must be found by using mathematical
accepted. When selecting from mutually exclusive projects, the trial-and-error to derive the appropriate rate. However, most
project with the shortest payback is to be preferred. business calculators and spreadsheet programs will automatically
The PBT can be calculated from eq. (7): perform this function.
Net Investment
PBT = (7)
Net Annual Return C. Application to the Case Study
Assuming the following figures the NPV & IRR can be calculated
Where net investment is the initial cost (mitigation equipment as following:
cost + installation cost) and net annual return is the annual  Capital investement of 4,550,000 $
expenses (operation + maintenance) subtracted from the annual  Benefit 1 from additional 110,160 TMS/year ~
benefits. 5,500,000 $/year
Although widely used, payback time suffers from several
 Benefit 2 from P.F bonus in electric bill ~ 500,000 $/year
drawbacks. First, PBT does not consider the time-value of money.
 Assuming life time of 20 years and Interest Rate of 10%
The second flaw is that payback does not consider the effects of
 NPV = 46,531,382 $ in total 20 years lifetime of the
different life-spans of the alternatives, thus penalizing projects
that have long potential life-spans. The third drawback is that the project
accept/reject criterion is often short. For example, many  IRR= 131.8% which exceeds the accepted 10% rate by
organizations require a 1 to 3 year payback period to consider a 13 times
cost-saving project and place a higher priority on projects with a  Pay Back period < 1 year.
shorter payback time.
ii) Net present value (NPV)
The net present value (NPV) of a project indicates the expected The EAF model in this paper gives more realistic simulation to
impact of the project on the value of the company. Projects with the EAF taking into consideration its chaotic nature.
a positive NPV are expected to increase the value of the company. The significant operational benefits can be summarized into
Thus, the NPV decision rule specifies that all independent higher P.F reaching more than 98% which is miraculous for a steel
projects with a positive NPV should be accepted. If NPV is making plant, voltage stabilization on the steel making bus with
greater than zero the project is valid, since the revenues are various EAF loading conditions which means increased
enough to pay the interest and recover the initial capital cost production and smoother operation and finally lower flickering,
before the end of the life of investment. When NPV equals zero, lower harmonic levels which means cleaner bus at PCC.
the balance occurs at the end of the life, and the investment is The financial impact showed that power quality is not only
scarcely attractive. When selecting from mutually exclusive beneficial for utility power grid but also for the plant itself. The
projects, the project with the largest positive NPV should be operation performance showed decrease in On-Tap time by 5
chosen. minutes resulting in increased daily productivity of 3 heats,
The NPV can be calculated from eq. (8): meaning 1,000 Tons molten steel/year which can be estimated to
(solution net saving)t
NPV = ∑ni=0 t – C0 (8) achieve payback period for the SVC investment in less than one
year for such application.
Where r is the discount rate, C0 is the initial investment, t is the
number of years, and n is the lifetime of the investment. In addition, the SVC network reactions were also discussed to
When comparing between two or more projects, the project with validate design limits and compare between actual and simulated
the higher NPV should be selected. network reactions to dynamic loading of EAF’s during SVC
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