When considering electricity usage, many people focus only on the energy that performs work, typically measured in kilowatts (kW). Modern electrical systems involve a more complex interplay of energy types. Kilo-Volt-Ampere Reactive, or kVAR, describes a necessary but often misunderstood component of electrical flow. Understanding kVAR is central to grasping how power is delivered efficiently and why utility companies monitor industrial energy consumption so closely.
Understanding the Three Types of Electrical Power
Electricity is comprised of three distinct components, often visualized using the geometric relationships of the Power Triangle. Real Power (kW) is the electrical energy converted into useful work, such as mechanical motion, heat, or light. This is the power that directly contributes to the output of a machine and is what residential consumers are typically billed for.
Reactive Power (kVAR) is the energy required to establish and maintain the magnetic fields that certain equipment needs to operate. Unlike Real Power, kVAR does not perform any direct work but instead cycles back and forth between the load and the source. While necessary for device function, its flow occupies capacity within the transmission lines and transformers.
The combination of Real Power and Reactive Power constitutes Apparent Power (kVA). This represents the total electrical demand placed on the utility’s generation and transmission equipment. The relationship is often illustrated by the beer mug analogy: the total volume (kVA) is the sum of the liquid beer (kW) and the foam head (kVAR).
The kVAR component reduces the capacity available for the delivery of the productive kW component. Utilities must size their equipment to handle the total Apparent Power (kVA), even though only the Real Power (kW) is doing the actual work.
Why Reactive Power Exists
Reactive power is a consequence of the design of alternating current (AC) electrical equipment that relies on electromagnetic principles. Many industrial and commercial devices, known as inductive loads, must create a magnetic field to convert electrical energy into mechanical energy. This kVAR energy is momentarily drawn from the source to build the field and then returned as the magnetic field collapses during each AC cycle.
Common examples of inductive loads include large induction motors, power transformers, and older fluorescent lighting ballasts. Without the continuous exchange of reactive energy, the magnetic fields cannot be properly established or maintained. Consequently, the desired work, such as mechanical rotation or voltage transformation, cannot occur effectively.
kVAR is not wasted energy but a necessary circulating energy that enables the core function of most electromechanical devices. It facilitates the transfer of Real Power across the air gap in a motor or between the windings of a transformer.
The Significance of Power Factor
The relationship between the three types of power is quantified by the Power Factor (PF), which is defined as the ratio of Real Power (kW) to Apparent Power (kVA). PF is expressed as a decimal or a percentage, and it serves as a measure of how effectively the total electricity drawn is converted into useful work. A system operating at a PF of 1.0 (100%) would be using all of its Apparent Power to do work.
When a facility has a large inductive load, it draws significant kVAR, driving the Power Factor down, often to 0.85 or lower. A low PF indicates that a large proportion of the current flowing is Reactive Power, which does not contribute to productive work. This means that for every kilowatt of useful power delivered, the utility must generate and transmit a disproportionately high amount of Apparent Power.
This increased current flow, necessitated by high kVAR, causes inefficiencies and strains throughout the electrical grid. Higher currents lead to increased heat generation in transmission lines, transformers, and switchgear due to resistance, known as \(I^2R\) losses. These resistive losses waste energy and reduce the capacity and lifespan of the utility’s equipment.
Utilities often implement financial penalties because they must invest in larger equipment to accommodate the higher Apparent Power (kVA) demand from low-PF customers. Commercial and industrial customers are charged based not just on their Real Power usage (kW) but also on their poor Power Factor. These structures incentivize large users to improve efficiency by reducing their kVAR draw from the grid.
A low Power Factor also negatively impacts the customer’s internal electrical system. The high current associated with excessive kVAR can lead to voltage drops within the facility’s wiring during periods of high demand. These fluctuations negatively affect the performance and longevity of motors and other sensitive equipment.
How Reactive Power is Managed
Given the drawbacks of a low Power Factor, businesses utilize Power Factor Correction (PFC) to manage their reactive power demand. The goal of PFC is to supply the necessary kVAR locally, preventing it from being pulled from the utility generator. This reduces the total Apparent Power (kVA) the utility must deliver.
The most common correction method involves installing capacitor banks, which act as a local source of reactive power. Inductive loads, like motors, require lagging reactive power to build magnetic fields, while capacitors naturally supply leading reactive power. Introducing the correct amount of capacitance largely offsets the kVAR needed by the motor with the kVAR supplied by the capacitor.
This local cancellation minimizes the circulating reactive current flowing through the main feeder lines and transformers. The result is a significant improvement in the facility’s Power Factor, which reduces energy losses, frees up system capacity, and lowers utility penalty charges.

