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Effects of Harmonic and Reactive Currents  
Among the three parts of the current, active currentaccounts to actual work done in the process while the other two are just circulating and do not contribute to work done. Reactive current leads to poor plant power factors and attracts penalty from the utility. On the other hand, presence of harmonic currentcause adverse effects on plant and degrades energy efficiency of the plant as well as utility. The adverse effects on the plant due higher harmonic levels could be 1) increased heating of transformers, motors and cables, 2) reduced plant efficiency, 3) protective devices malfunctioning leading to increased down time, 4) reduced life span of costly and sensitive plant equipment due to increased stresses etc.

These effects of harmonics are much more intense on upstream utility equipments (such as transmission lines, transformers, substations) in terms of poor efficiency, overheating, frequent failures, and reduced lifetime. In order to enhance overall system reliability and efficiency, utilities are mandating the consumers to comply with IEEE standards on power quality. Failing to meet these stringent standards, utilities started to impose large penalties and even going for supply disconnection in some cases.­­­­
 
 
 
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