Many electrical devices, e.g.

single-phase and three-phase motors, require

inductive reactive power Q for the build-up and decay of their magnetic fields,
in addition to the active power that is transformed into mechanical work. These
inductive loads draw a current I from the power network that lags behind the vol
tage U.
This can constitute a significant part of the electricity bill.
The useless reactive energy component of the transmitted energy should be
kept as small as possible to minimise pollution as well as equipment and
energy costs.
An inductive reactive current and an equally large capacitive reactive current
cancel each other. The inductive reactive current, e.g. from motors, can
therefore be compensated by the capacitive reactive current from capacitors.
This process is known as reactive current or reactive power compensation.

for the reactive compensation,a refrence value of PF is kept ==0.9