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Reactive power is the resultant power in watts of an AC circuit when the current waveform is out of phase with the waveform of the voltage, usually by 90 degrees if the load is purely reactive, and is the result of either capacitive or inductive loads. Only when current is in phase with voltage is there actual work done, such as in resistive loads. An example is powering an incandescent light bulb; in a reactive load energy flows toward the load half the time, whereas in the other half power flows from it, which gives the illusion that the load is not dissipating or consuming power.
Reactive power is one of the three types of power present in loaded circuits:
Reactive power is also called "phantom power" because it is not apparent where it goes. It is common knowledge that reactive loads such as capacitors and inductors do not actually dissipate power in a sense that it is not used to power them, but measuring the voltage and current around them indicates the fact that they drop voltage and draw current. The power dissipated through this voltage drop and current draw is in the form of heat or waste energy and is not done as actual work; hence engineers have sought ways to lessen this. Because of this phantom power, conductors and generators must be rated and sized accordingly to carry the total current including the waste and not just the current that does the actual work.
Capacitors are considered to generate reactive power, whereas inductors consume it. So when both are placed in parallel connection, the current flowing through them cancels out. This is essential when controlling the power factor of a circuit and has become a fundamental mechanism in electric power transmission. Adding both capacitors and inductors in a circuit helps partially compensate for the reactive power consumed by the load.