Uitlity systems have the ability to provide KW (voltage and current in phase), KVAR (voltage and current out of phase), and harmonic current (current at integer multiples of the base frequency). VAR and harmonic current are conducted in the power cables.
VAR current proportionally reduces the ability of the grid to provide real current (KW).
Harmonic current causes heating disproportionate to its amplitude. Heating effect is much larger than actual current amplitude.
When loads demand either VAR or harmonic current, the grid capacity is reduced. Therefore, the grid conductors must be oversized where this occurs. The solution to prevent over utilization or oversizing of the grid due to VAR and harmonic current is to provide the source of each locally and remove the demand from the grid – PF correction and harmonic filters.
From the generation side, when rotating generators are used to produce the power, the generator has the ability to provide VAR support readily. It is the electrical nature of the generator. Generators do not like to produce harmonic current – extra heating occurs – but can.
However, as we move to more and more alternative methods of power generation, the electronics used to create the power (from PV or wind or etc.) only produce KW. Thus a need of alternate KVAR and harmonic support is required. This can be local by the user or universal by the utility. The cost must be born by the user in all cases.
From an energy efficiency stand point, local support for both KVAR and harmonic current reduces the cost of transmission (size of cables and alternate sources) and utilization of the grid. It permits more KW to be transmitted on the existing cables and permits planning of future grids to include smaller cables = less mineral resources consumed and processed. It helps make the planet greener.