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Basically an AC transmission line require compensation in terms of reactive power. To push the active power across a transmission line certain amount of reactive power is necessary. In AC transmission line reactive power is generated and consumed. Generator is responsible for the production of reactive and active power both. Than this reactive power is consumed by the load and transmission line. Additional reactive power s supplied by the capacitor. This extra power supplied by the capacitor is termed as reactive power compensation. Requirement of this reactive power is there because reactive power is necessary to maintain the voltage stability.

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