How does a VSD work? 

A VSD converts the 50Hz fixed-frequency and fixed-voltage AC power supply into a DC supply, using an integrated rectifier. Integrated power electronics then convert the DC supply into a sinusoidal output with continuously variable frequency and voltage, which is used to drive the motor. In other words, a fixed sinewave in is converted into a variable sinewave out.
This variable output enables the VSD to quickly change the speed and the torque of the motor in response to the changing load. The required variation in output is controlled by onboard microprocessors. Modern VSDs have no moving parts and are therefore highly reliable and efficient.
A VSD typically has an operator interface that enables manual operation of the drive and the configuration of parameters to match the VSD to the motor and to the application.
What types of systems are best suited to a VSD?
Systems that require control of flow or pressure are most suited to the use of a VSD. This is because the consumed power is roughly proportional to the cube of the flow, or speed of the motor . Such applications may include:
· Fans and pumps: In applications where the flow of fluid is variable, considerable energy savings can be achieved by replacing existing throttling valves and dampers with VSDs. 
· Conveyors: For conveyors with varying speed or with varying material flow, a VSD can adjust to the changing load requirements. 
· Compressors and chillers: In the same manner as fans and pumps, compressors can take advantage of the energy saving that is achieved by varying the flow with a VSD.