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The cost of electricity has been increasing rapidly – both because of increased prices and increased demand. Since electricity spend is one of the major operating costs for both commercial and industrial consumers, reducing and keeping a tight control on electricity costs is increasingly becoming a key performance indicator.

Any deviation in voltage and current waveform from perfect sinusoidal, in terms of magnitude or phase shift is termed as unbalance. In ideal conditions i.e. with only linear loads connected to the system, the phases of power supply are 120 degree apart in terms of phase angle and magnitude of their peaks should be same. On distribution level, the load imperfections cause current unbalance which travel to transformer and cause unbalance in the three phase voltage. Even minor unbalance in the voltage at transformer level disturbs the current waveform significantly on all the loads connected to it. Not only in the distribution side but through the transformer, voltage unbalances disturbs the high voltage power system as well.

Power Factor (P.F.) can be viewed as the percentage of total apparent power that is converted into real or useful power.