Power factor correction is the effort made to improve the power factor at the interface of the load with the power supply.
The simplest way to produce reactive power locally is to use shunt (parallel) capacitors at the interface of the loads with the supply. Capacitors generate reactive power due to their leading power factor.
Here, the loads is usually inductive – they have a lagging power factor, such that they draw reactive power together with active power.
- If all or part of the reactive power required by the load is produced locally (i.e., at the interface of the load with the supply), there is no/less need for reactive power to be supplied by the source.
- Without local reactive power generation, the reactive power required by the load must be transferred to the load through long, lossy lines.
- Part of the capacity of the lines will then be occupied by reactive power, limiting the active power that can flow through the lines.
- Line losses also result in overall lower efficiency in power delivery.
- If the capacity of the lines is devoted to active power only, more active power can be transferred through the existing lines and less unnecessary losses will occur. The voltage drop in lines is also reduced this way.