This document discusses reactive power compensation in power systems. It defines reactive power as power that is temporarily stored and returned to the source due to inductive loads. Reactive power compensation is needed to improve power factor, reduce losses, improve voltage regulation and stability. The main compensation techniques discussed are synchronous condensers, shunt compensation using capacitors connected in parallel, and series compensation using capacitors connected in series to reduce line inductive reactance. The document provides examples of transmission lines with shunt and series compensation and concludes that reactive power compensation is important for improving AC system performance.