For the transmission and consumption of electricity, an electric and magnetic field is required. To build these fields, electrical equipment needs reactive power. Reactive power, as well as active power requires balance in the consumption and generation at all times. Depending on the need for reactive power compensation, the electrical system also uses devices for compensating reactive power, which include synchronous compensators, capacitor banks and various static compensators. Reactive power compensation refers to the optimization of reactive power transmission and related measures in the electricity grid, including issues related to additional sources of reactive power and their management.

The idea of reactive power compensation and the technical and economic effect, that can be achieved, are mainly based on the following:

increase in network capacity

reducing capacity and energy losses in the network

better voltage quality

greater reliability of the electrical system.

Reactive power compensation is one of the most effective measures for saving electricity, as it allows to reduce the reactive power transmitted in the electricity network and with it active power losses. Where system operation allows, cross-capacitors and reactors should generally be preferred as the cheapest equipment. Static reactive power compensators solve virtually all problems related to stability and voltage regulation.