Variable Frequency Drives or VFDs as they are popularly known as devices which control the speed of induction motors by altering the input power supply frequency.
Induction motors rotate due to the rotating magnetic field produced by the stator winding. This induces a current in the rotor winding. The interaction of the magnetic fields of the stator and the rotor causes the motor to rotate.
Thus, the speed of the induction motor is dependent on the supply frequency.
Variable Frequency Drives are basically AC-AC converters. These converters use thyristors to alter the power frequency. This enables the precise control of the motor speed. Another feature of these drives is that no power is lost in the speed control.
The output frequency of the drives can be controlled by controlling the firing angle of the thyristors.
Variable Frequency drives also save power by operating devices such as pumps and blowers at speeds where their efficiency is maximum.
Useful Link
http://www.vfds.com/blog/what-is-a-vfd