Problems concerning electrical power quality and especially estimation of costs required for reduction of higher harmonics in power network voltage and current time waveforms have been considered in the paper. The application of active power filters to reduction of higher harmonics has been analysed taking into account, in particular, the necessary investment costs. Two goal functions have been used to solve the underlying optimization problem - the first one that enables direct cost minimization and the second one based on the cost-effectiveness approach used by economists. Such approach is substantially different from solutions proposed by other authors who concentrate rather on theoretical issues and do not take into consideration the economical market-based reality. In the paper, theoretical analysis has been followed by an example of optimal allocation of active power filters in a large supply system.
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