Reactive power compensation in Transmission and Distribution systems: The reactive power is present in lines due to the reactive loads and device/ component reactances. This leads to heavy currents for active power transmission that result in overheating of transmission systems etc. and hence fall in the system efficiency. Reactive power compensation leads to reduction of line/system current due to which the inherent current related power losses (I2R) in the system are reduced, leading to increase in the system efficiency and improvement in the power quality. Also as reactive power is compensated (leading to its reduction) the power factor is improved. Thus energy is conserved as the losses in the lines are minimized and the excess magnetizing current for increasing the voltage is avoided leading to savings. Diagram shows a scheme of reactive power compensation used in transmission and distribution systems.