Basic Concept
Most loads on an electrical distribution system can be placed in one of three categories:

  • Ø       Resistive
  • Ø       Inductive 
  • Ø       Capacity
The most common of these three on modern systems is the inductive load. Typical examples of which include transformers, fluorescent lighting and AC induction motors.
The common characteristic of these inductive loads is that they utilize a winding in order to operate. This winding produces electromagnetic field which allows the motor or transformer to function and requires a certain amount of electrical power in order to maintain this field.
All inductive loads require two kinds of power to function properly:
1) Active power (kW) – actually performs the work
2) Reactive power (kvar) – sustains the electromagnetic field
One common example of reactive power can be seen in an unloaded AC motor. When all load is removed from the motor, one might expect the no-load current to drop near zero. In truth, however, the no-load current will generally show a value between 25% and 30% of full load current. This is because of the continuous demand for magnetizing current by any induction load.

Active power is the total power that would be read on a watt meter. Apparent power is the combination of reactive and active power.

Power factor is the relationship between working (active) power and total power consumed (apparent power).
Essentially, power factor is a measurement of how effectively electrical power is being used. The higher the power factor, the more effectively electrical power is being used and vise versa.
A distribution system’s operating power is composed of two parts: Active (working) power and Reactive (non-working) magnetizing power. The Active Power performs the useful work ….. the Reactive Power does not, as its only function is to develop magnetic fields required by inductive devices.
Generally, power factor decreases (Q increases) with increased motor loads. Therefore, when more inductive reactive power is needed, more apparent power is also needed. This geometric relationship of apparent power to Active power is traditionally expected by the right triangle relationship of:

Cos Ø = P.F. = kW  


Low power factor means poor electricity efficiency. The lower the power factor, the higher the apparent power drawn from the distribution network.
When low power factor is not corrected, the utility must provide the non-working reactive power in addition to the working active power. This results in the use of larger generators, transformers, bus bars, cables and other distribution system devices, that otherwise would not be necessary. As the utilities capital expenditure and operating costs are going to be higher, they are going to pass these higher expenses down the line to industrial users in the form of power factor penalties.


  • Ø       High power factor eliminates utility power factor penalties.
  • Ø       High power factor reduce the /2R losses of transformers and distribution equipment.
  • Ø       High power factor stabilizes voltage levels.
As the power factor drops from 1.0 to 0.9, power is used less effectively. Therefore, 10% more current is required than when the power factor was 1.0 to handle the same load.
A power factor of 0.7 requires approximately 43% more current; and a power factor of 0.5 requires approximately 100% (twice as much) as required when the power factor was 1.0 to handle the same load.

Low power factor is a problem that can be solved by adding power factor correction capacitors to the plant distribution system. As illustrated the power factor correction capacitors work as reactive current generators “providing” needed reactive power (kvar) into the power supply. By supplying their own source of reactive power, the industrial user frees the utility from having to supply it; therefore the total amount of apparent power supplied by the utility will be less.

Power factor correction capacitors reduce the total current drawn from the distribution system and subsequently increase system capacity by raising the power factor level.

Power factor correction capacitors are rated in electrical units called “Vars”. Once var is equivalent to one volt-ampere of reactive power. Vars then are units of measurement for indicating just how much reactive power the capacitor will supply. As reactive power is usually measured in thousands of Vars, the letter “k” (abbreviation for “kilo”, meaning thousands) precedes the var creating the more familiar “kvar” term.

The Capacitor kvar rating then shows how much reactive power the capacitor will supply. Each unit of the capacitors kvar will decrease the inductive reactive power demand (magnetizing demand) by the same amount.


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