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What is the Principle of Compensation by sector and its advantages in power factor correction system.

Principle of Compensation by Sector type Power Factor Correction:

Capacitor banks are connected to busbars of each local distribution board.
 
Advantages:
  1.  Reduces the tariff penalties for excessive consumption of kvars
  2.  Reduces the apparent power kVA demand, on which standing charges are  usually based
  3.  Relieves the supply transformer, which is then able to accept more load if necessary
  4.  The size of the cables supplying the local distribution boards may be reduced, or will have additional capacity for possible load increases
  5.  Losses in the same cables will be reduced
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