The power transmission to a factory involves the transfer of apparent power, a combination of active and reactive power. The power factor measures how effectively electrical power is converted into useful work output. The ratio of the real power (KW) that does the work to the apparent power (KVA) supplied to the circuit.

A poor power factor means the inductive electrical load absorbs more reactive power, causing a low lagging power factor. This results in large voltage drops across the load and thermal losses, increasing electricity costs and reducing system efficiency. Power factor correction is done by adjusting the power factor toward unity to get an efficient system. The power factor can be improved by adding a compensating impedance like self-tuning capacitors parallel to the load. The effect of adding the capacitor can be demonstrated using the power triangle because the real and reactive power can be analyzed by examining the power triangle.

A capacitive load is added in series or parallel, and the power factor angle is decreased without changing the real power. The value of the power factor is adjusted. Series capacitors are used for power factor correction in long transmission lines. The series-connected capacitors counteract the inductive nature of the line by providing a leading current that can neutralize some of the lagging reactive power, as a result, improving the power factor. Shunt capacitors are the most widely used for power factor correction. The capacitors are connected parallel to the load and provide a leading current that offsets the lagging reactive current caused by inductive loads. This brings the overall power factor closer to unity. By counteracting the inductive effects, shunt capacitors can reduce the amount of reactive power drawn from the supply, making the system more efficient.