This is the first of two education modules on volt/VAR technologies. Read the second here.
The world consumes an enormous amount of electricity, some of which is lost on its way from where it is generated (e.g., power plants and wind farms) to where it is used (e.g., homes and businesses). The U.S. Energy Information Administration (EIA) estimates that, every year in the U.S., about six percent of the electricity that is transmitted and distributed is lost. The U.S. Department of Energy estimates that increasing energy efficiency could reduce national energy use by as much as 20 percent in 2020, resulting in net economic benefits for consumers and businesses. Reducing energy losses by only a small amount could result in substantial energy savings and greenhouse gas emissions reductions. Losses of electrical energy and demands on electric distribution systems can be reduced substantially through a number of proven technology methods. A wide range of technologies already exist to achieve that objective. Traditional volt/VAR (volt amps reactive) management technologies have been used by the power industry for over 30 years to reduce electric line losses and increase grid efficiency. But, unlike the traditional approach using uncoordinated local controls, voltage and VAR optimization (VVO) uses real-time information and online system modeling to provide optimized and coordinated control for unbalanced distribution networks with discrete controls.
Since the inception of distribution systems, many endeavors have been made to address the impacts of reactive power and voltage drop on distribution systems. Equipment such as distribution line voltage regulators, load tap–changing transformers, and switched and fixed capacitor banks have been developed to help keep customer voltages within regulatory bandwidth parameters. These devices also free up capacity in the generation, transmission, and distribution systems and diminish real power losses. Figure 2 provides a timeline of the major developments in distribution volt/VAR control from the 1930s to present day. 
Volt/VAR optimization and volt/VAR control
Power electronics and controls have great potential and value within the distribution power grid because of their unique ability to control current, voltage, and power factor, which allows for control of real and reactive power. Voltage and current fluctuations in electrical distribution systems are becoming more severe and frequent due to increased installations of intermittent power sources within the distribution system, such as photovoltaic (PV) panels. Control of voltage in distribution systems is currently accomplished with load tap changers, line regulators, and capacitors. These traditional devices can be switched in and out of the circuit to provide step changes in voltage and power factor. They can be switched manually or automated to react within seconds of detecting voltage fluctuation beyond desired limits. However, such devices are designed to achieve step changes in voltage and power factor for medium to long timeframes and do not dynamically adjust the distribution circuit to changing conditions.
Today, VVO technologies have advanced to include sensors, power electronics equipment, and software capable of reducing overall distribution line losses by two to five percent through tight control of voltage and current fluctuations. Volt/VAR has no noticeable effect on the consumer or machinery and still conforms to standards that maintain the high quality of electricity in the U.S., such as ANSI C84.1.
 Eaton’s Cooper Power Systems. Accessed May 4, 2016. http://www.cooperindustries.com/content/public/en/power_systems/solutions/ivvc.html.
 Ventyx, an ABB Company. Model-Based volt/VAR Optimization: An Introduction. (Page 4). 2012. http://www.electricityforum.com/whitepapers/Whitepaper-intro-model-based-volt-var-optimization_Ventyx.pdf.