The compensation of VAR involves the management of reactive power for the improvement of electric power system performance. Power quality problems such as fast voltage profile maintenance at all power transmission levels and improvement of power factor, transmission efficiency and system stability can be solved by adequate reactive power control. This paper establishes the effect of reactive power flow on the transmission efficiency and power factor. Series and shunt VAR compensation methods were used to modify the natural electrical characteristics of power system. Series compensation was used to modify the reactance parameters of the transmission system while shunt compensation was used to change the equivalent load impedance. Series-capacitive arrangement reduced the total reactive power loss by a large margin as compared to shunt-capacitive arrangement. Shunt-capacitive arrangement improved the system power factor by a large margin as compared to series-capacitive arrangement. Load power factor always remain constant with and without any compensation. A maximum reactive output power of 20.93KVAr gave a transmission efficiency of 88.7% and a power factor of 0.966. The result of the work showed that shunt-capacitive arrangement reduced the total active power loss while series-capacitive arrangement had no effect on it. In both compensation methods, the line reactive power was effectively controlled thus improving the performance of the overall power system.
