Typically, “power factor correction” is handled by capacitor banks or active filters, not a dedicated transformer. However, transformers involved in PF correction schemes may step voltages for capacitor banks, harmonic filters, or synchronous condensers. Their role is to provide appropriate voltage and isolation so reactive compensation devices can safely connect to the network. The net effect is reduced reactive power flow from the grid, improved PF, lower losses, and better utilization of generation and transmission capacity.