Does an induction machine actually consume reactive power?
Yes, an induction machine always consumes reactive power, both working as generator or as motor (more common case). Reactive power is necessary for the operation of any induction machine.
It is not quite correct to say that reactive power is consumed. Reactive power is the continuous transfer of energy back and forth between capacitive and inductive storage. The only energy that is consumed in the usual sense is due to relatively small losses dissipated as heat in resistance during energy transfer. The only capacitive storage elements are capacitors and wound-field synchronous machines.
That being said, it is true that induction motors require reactive current to function. The reactive component of the current creates the rotating magnetic field in the motor. The real component results in real component of the input electrical power that is converted to mechanical power.
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