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Reactive Power Compensation: What Is It and Why Is It Needed?

26 Feb 2026

What Is Reactive Power?

In electrical systems, active power (W) is the power that does real work. Reactive power (VAR) is the power absorbed by inductive loads such as motors, transformers and fluorescent lamps — it circulates in the system but does no useful work.

Why Does It Cause Problems?

High reactive power consumption leads to the following problems:

  • Unnecessary current increase and heating in distribution lines
  • Increased transformer and network losses
  • Reactive energy penalties (additional charge on electricity bill when cosφ ≤ 0.90)
  • Voltage drops and power quality issues

How Does Compensation Work?

Capacitors meet the reactive power drawn by inductive loads on-site, reducing the load on the system. Automatic reactive power compensation panels take instantaneous measurements and switch capacitor banks in or out as needed.

Benefits

  • Power factor correction (cosφ → 0.98)
  • Elimination of reactive energy penalties
  • Effective use of transformer and cable capacity
  • Improved voltage stability

Take advantage of our free study service to determine your facility's compensation needs. Contact us now.

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