This paper explains the development of a chiller power estimation method, based on understanding the processes nature, and building each term in the equation with intention to reflect some distinct phenomena and to realize the sense of its value. The analysis is started with a study of refrigerant isentropic compression, continued with estimating the power losses in centrifugal variable speed single-stage compressor, and completed by evaluating heat dissipation in frequency drive and motor. The results have been successfully verified with chillers of different sizes, achieving good accuracy over wide ranges of condenser water temperatures and loads