The demand of this reactive power is mainly originated from inductive load connected to the system. These inductive loads are generally electromagnetic circuit of electric motors, electrical transformers, inductance of transmission and distribution networks, induction furnaces, fluorescent lightings etc. This reactive power should be properly compensated otherwise, the ratio of actual power consumed by the load, to the total power i.e. vector sum of active and reactive power, of the system becomes quite less.

This ratio is alternatively known as electrical power factor, and fewer ratios indicates poor power factor of the system. If the power factor of the system is poor, the ampere burden of the transmission, distribution network, transformers, alternators and other equipments connected to the system, becomes high for required active power. And hence reactive power compensation becomes so important. This is commonly done by capacitors.

Key Features
✔ It reduces line current of the system.
✔ It improves voltage level of the load.
✔ It also reduces system Losses.
✔ It improves power factor of the source current.
✔ It reduces load of the alternator.