KW vs. KVA

KW= VICosΦ /1000 = V.I (Dot Product)

KVA = VI = arithmatic product.

KW = Active power ie tha actual power that can be converted to work done.

KVA = apparant power = Includes Active power and reactive power (ie the power that gets exchanged between different components within the system but does not go out of the system)

It is like a spring and fly wheel (or any other system inertia) connected to a load.

The spring and flywheel keep on exchanging power between them - but that toes not affect the load. What gets the work done is what the system (spring, flywheel etc) transmits to the load (W).

However the power flowing within the links (within the system) include the power exchange taking place between the spring and flywheel too, so these are designed to carry that extra power. Somehow you make this exchange zero (though not always possible or practical or wanted- sometimes you deliberately introduce these energy storing equipments) , and you have only the power required by load flowing through the system, no more no less, and that makes design less costly.

This is as simple as I can make it.

http://www1.eere.energy.gov/industry/bestpractices/pdfs/mc60405.pdf