In industrial area's due to inductive loads the power factor
becomes low. As the PF low, the inductive power also becomes
low.To raise the power we use APFC Panel.

when power factor is unity,then industries receive active 
power or useful power only i.e KW=KVA
If it is lagging PF,the industries receive both useful power
(KW) and reactive power(useless power)(KVAr).To meet this 
reactive power, distribution transformer capacity also to 
be increased.Then only we can avoid low voltage,losses 
etc.  
So we have to provide APFC panel to bring the pf to unity

APFC Panel is used to maintain the power factor near unity 
by adding capacitance across the load.
  P = V x I x Power factor.
 100 = 100 x 1 x 1  ( Idle case)
  If power factor decrease to 0.1 
 100 = 100 x 10 x 0.1

  Here we can observe that current in circuit increased 
from 1 amp to 10 amp with decrease in power factor from 1 
to 0.1

This is the effect of  low power factor in system. Due to 
this increased current higher rating of cables , breakers 
etc required. also due to this increased current we require 
more power generated as MVA demand shoots up.

The ideal Power Factor (PF) is Unity or 1, but most 
Industrial loads have a PF lower than 1. Moreover, this 
lower PF is usually due to Inductive loads, arising out of 
the windings of Transformers, Motors,etc. These loads 
consume kVARs (the Wattless component) from the supply 
line. The APFC supplies these kVARs via a capacitor located 
close to the load, reducing the current drawn from the 
supply line. For an Industry with dynamically changing 
loads, Automatic PF Compensation affords the best Return on 
Investment, since the kVAR investment required is smaller 
than with fixed capacitors needed to meet the entire load.

lower Power factor,s harms every one knows, but we use a 
capacitor panel to confirm our p.f. not crossing limits 
causing government penalty on lower p.f of plant.

kva=kw+kvar
apparant power is constant because our TR rating we cannot 
alter so if KVAR is incress active power is decress so we 
cannot use power for useful for that at the same time for 
low PF it draw more currrent so we have to design the 
appaliences for higher rating.