Reactive Power Compensation · Glossary

Reactive power compensation comprises technical and operational measures by which reactive power in an AC grid is reduced, balanced or deliberately provided. It serves mainly to maintain voltage, to relieve lines and transformers, and to improve the power factor. Reactive power performs no useful work. It does not drive a motor and does not heat a heating element. Nevertheless, it influences the current, the voltage conditions and the loading of electrical equipment.

The unit of reactive power is the var, in practice usually kvar or Mvar. It must be distinguished from active power in watts, kilowatts or megawatts, which is the power actually transmitted in usable form. Active and reactive power together make up the apparent power in VA. However, they are not simply added. For sinusoidal quantities, geometrically S = √(P² + Q²) applies, as with the sides of a right-angled triangle. The power factor indicates the ratio of active power to apparent power. For purely sinusoidal currents and voltages, it equals cos φ, that is, the cosine of the phase shift between current and voltage. With harmonics, for example from power electronic devices, the power factor is smaller than cos φ. Classical compensation of the fundamental-frequency reactive power then does not eliminate this component. A low power factor means that more current flows for the same useful power. This additional current loads lines, transformers and switchgear, causes losses and ties up grid capacity.

Reactive power arises in AC systems through electric and magnetic fields. Inductive equipment such as motors, transformers or reactors needs it to build up its magnetic field and, under the usual consumer-based sign convention, absorbs inductive reactive power. Capacitive equipment such as capacitors or lightly loaded cables behaves the opposite way and supplies reactive power, when viewed from the standpoint of inductive consumers. Converters can do either, depending on their control. Because alternating current constantly reverses direction, part of the energy oscillates back and forth between the source and the field storage. Many devices need this oscillating energy. It should not, however, flow unnecessarily over long distances through the grid.

Distinction from active power, energy and flexibility

Reactive power compensation is often confused with energy saving. A compensation system does not automatically reduce the consumption of active energy in kilowatt hours. It can reduce grid losses and make connection capacities more usable. However, it does not replace an efficiency measure in the actual process. An industrial plant with many motors can use compensation to reduce its reactive power draw and thereby the grid load or the costs for reactive energy. The mechanical work of the motors remains the same. On the customer side, resistive losses fall only in the lines between the compensation system and the grid connection.

Reactive power compensation is also not the same as flexibility. Flexibility usually means that active power is shifted in time or adjusted, for example with heat pumps, electrolysers, battery storage or industrial loads. Reactive power compensation, by contrast, concerns the electrical mode of operation in the AC grid. It can in part be controlled very quickly and is therefore valuable for grid operation. However, it does not supply energy over hours and does not replace firm active power.

The term must also be separated from frequency control. Grid frequency depends mainly on the balance between generated and consumed active power. Voltage, by contrast, is strongly determined by reactive power flows, grid impedances and the local feed-in or consumption situation. In simplified debates, voltage and frequency are sometimes treated together as "grid stability". For practical operation the separation is central, because different equipment, rules and responsibilities are affected in each case. In regulation, voltage control therefore counts among the non-frequency ancillary services.

Why reactive power is locally relevant

Reactive power can technically be transmitted. Over long distances, however, this is usually impractical. Lines and transformers are loaded by the current, regardless of whether it carries active or reactive power. If reactive power flows over long distances, it occupies transmission capacity, increases losses and itself causes voltage drops across the lines. Reactive power is therefore, wherever possible, provided or absorbed where it is needed.

In this respect reactive power differs from many energy-economic quantities that relate to annual volumes, market areas or balancing groups. Reactive power compensation concerns a specific grid node, a voltage level and the respective operating situation. A distribution grid with many photovoltaic systems needs something different from an industrial grid with large motors or a transmission grid with long overhead lines and cable sections. The same quantity can have a stabilising or a burdening effect depending on location and time. An example: an extended cable network generates a lot of capacitive reactive power at low load and drives the voltage upwards. At high load, by contrast, the inductive demand of the lines predominates.

Reactive power is particularly important for voltage maintenance. In high- and extra-high-voltage grids, whose lines act predominantly inductively, absorbing reactive power usually lowers the voltage, while providing it raises it. This rule is not universally valid. In low-voltage grids with a high resistive line share, active power also strongly influences the voltage. Grid impedances and load flow directions also play a role. As an operational guideline it nevertheless holds: controlling reactive power is a central tool for keeping voltages within permissible limits.

Technical means of compensation

Capacitor banks provide capacitive reactive power and thus balance inductive reactive power, for example in industrial plants or distribution grids. They are switched in fixed fashion or in steps. In grids with harmonics, they are often detuned (fitted with series reactors) to prevent resonances.
Reactors (compensation coils) absorb capacitive reactive power. This is important above all with long cables, offshore connections or lightly loaded lines. They operate robustly but can only be adjusted in steps and comparatively slowly.
SVCs (static var compensators) combine thyristor-switched or thyristor-controlled capacitors and reactors and thereby regulate quickly and continuously. Because they behave like variable impedances, their reactive power falls roughly with the square of the voltage when the voltage drops.
A STATCOM is a compensation system based on a voltage-source converter. Up to the limit of its rated current, it can still supply almost the full reactive current even when the grid voltage is greatly reduced. It is therefore suited to fault and weak-grid situations.
Synchronous machines, for example rotating phase shifters or converted power plant generators, provide reactive power. In addition, they supply short-circuit power and instantaneous reserve from their rotating mass.

Inverters of wind and photovoltaic plants, battery storage or industrial drives can also control reactive power. This changes the role of decentralised plants. Previously, many smaller generation plants fed in largely passively. Today the technical connection rules often require that they can provide or absorb reactive power within defined limits, for example via characteristics such as cos φ(P) or Q(U). Part of voltage maintenance thereby shifts into the distribution grids. Coordination between plant operators, distribution system operators and transmission system operators becomes all the more important.

Transformers also contribute to voltage control. Controllable local-grid transformers or tap changers in substations change the transformation ratio and thus the voltage level. They do not generate reactive power themselves, but they shift reactive power flows between voltage levels. They thus serve the same operational task, namely keeping the voltage at all grid connections within permissible limits.

Legal framework in Germany

In Germany, the provision of reactive power rests on three pillars: technical connection rules (TAR/TAB), market-based procurement and grid-owned equipment. The minimum technical requirements for the reactive power capability of generation plants and storage result from the technical connection rules, in the high-voltage level for example from VDE-AR-N 4120. What exceeds this minimum capability can be procured on a market basis. Since 27 November 2020, § 12h para. 1 sentence 1 no. 1 EnWG obliges grid operators to procure the non-frequency ancillary service "voltage control services" in a transparent, non-discriminatory and market-based manner.

The Bundesnetzagentur has laid down the details in decision BK6-23-072 of 25 June 2024. Accordingly, the control-area-responsible transmission system operators and distribution system operators with a high-voltage grid procure reactive power from plants whose grid connection point lies in the extra-high or high voltage. Operators of low- and medium-voltage grids are exempted from this obligation because, in the authority's assessment, nationwide market procurement there would currently not be economically efficient. The transmission system operators introduced the reactive power market for the first time in 2025. According to grid operators, the pilot phase began in June 2025 and is to last up to 24 months. With a determination of 9 October 2024, Ruling Chamber 8 recognises the procurement costs as volatile costs for the fourth regulatory period.

For plants in the low and medium voltage, the requirements of the technical connection rules and those of the respective grid operator therefore continue to apply. For consumers with power metering, grid operators frequently provide for charges for reactive energy if a contractually specified power factor is not met. The respective grid operator sets the limit value and the price.

Economic and institutional significance

Reactive power compensation is more than a technical detail. It influences grid expansion, connection capacities, grid losses and the distribution of costs among grid users. If a large consumer draws a lot of reactive power from the grid, it places additional load on the equipment. Rules for billing reactive energy are intended to prevent such costs from being spread entirely across all grid users, even though individual connection users cause or can avoid them.

Requirements for reactive power capability at the grid connection point can trigger investments, for example in larger-sized converters or additional compensation systems. At the same time, they can avoid or delay grid expansion if existing lines and transformers can be used more heavily thanks to better voltage maintenance. How economical a compensation system is therefore depends not only on its price. Its location in the grid, its controllability and which other measures it makes unnecessary also matter.

A common mistake is to regard reactive power as a free by-product function of modern converters. Many converters can indeed provide reactive power, but their current-carrying capacity is limited. A worked example shows this: an inverter with 100 kVA apparent power that supplies 60 kvar of reactive power can deliver at most 80 kW of active power. In addition, there are losses, control effort and requirements for communication and grid protection. Anyone who wants to use reactive power systematically must take these side effects into account in connection rules, operational management and remuneration.

Misconceptions in practice

A widespread misconception is that reactive power is bad in principle. What is problematic, however, is above all uncontrolled or far-transported reactive power. Deliberately used reactive power is necessary for grid operation. Motors, transformers and lines cannot be meaningfully described without reactive power effects. A grid entirely without reactive power is not a realistic AC grid.

Equally imprecise is the assumption that a power factor of one is always the best target. For individual consumers, a high power factor often makes sense because it avoids unnecessary current flows. In a grid area, however, capacitive or inductive reactive power may deliberately be needed to manage the voltage. What matters is therefore not whether reactive power disappears completely. What matters is where it arises, how it is controlled and who is responsible for providing it.

The term "compensation" is also misleading if it is understood only as neutralisation. In modern grids it is often a matter of active reactive power control. Photovoltaic inverters, wind farms, STATCOM systems and controllable transformers do not merely balance a computational account. They respond to voltage values, grid loading, connection rules and grid control requirements. Reactive power compensation thus becomes part of coordinated grid operation and at the same time one of the ancillary services.

With electrification and the expansion of renewable generation, the topic is becoming more important. More heat pumps, charging points, photovoltaic systems, battery storage and power electronic devices change load flows and voltage profiles, especially in distribution grids. At the same time, converter-based plants are increasingly replacing conventional power plants, which formerly supplied reactive power at central grid nodes and supported the voltage. This creates a greater need for decentralised measurement, clear connection rules, controllable equipment and new procurement routes such as the reactive power market.

Reactive power compensation shows that a power grid does not function by energy quantities alone. Kilowatt hours explain neither voltage quality nor line loading nor whether a grid node can accommodate further plants. The term describes a local, electrical and control-engineering task. Reactive power flows are to be limited or provided in such a way that active power can be transmitted reliably and voltages remain within the permissible range. Therein lies its practical significance for grid operation, connection planning and the costs of an increasingly decentralised power system.

Sources

Spannungshaltung in Netzen („Blindleistung“) – Beschlusskammer 8 — Bundesnetzagentur; unbekannt. Abschnitte „Festlegung zu den Spezifikationen und technischen Anforderungen“ und „Festlegung volatiler Kosten“
Marktgestützte Beschaffung von Blindleistung — TenneT TSO; unbekannt. Abschnitt „Einführung neuer marktgestützter Beschaffung 2025“
BK6-23-072 – Zweite Konsultation (Ausnahme Nieder- und Mittelspannung) — Bundesnetzagentur, Beschlusskammer 6; unbekannt (Verfahren eröffnet am 31.03.2023). Konsultationstext
BK6-23-072 – Verfahrenseröffnung — Bundesnetzagentur, Beschlusskammer 6; unbekannt (Verfahrenseröffnung 2023). Einleitung des Festlegungsverfahrens
Stellungnahme zum Festlegungsverfahren RAMEN: Anerkennung von Kosten aus der marktgestützten Beschaffung für Blindleistung — Verteilnetzbetreiber (veröffentlicht von der Bundesnetzagentur); 28.02.2025. Abschnitt zu VoKaBl und BK6-23-072

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Edited by eCMS on 11.11.2026 16:09