Induction generators, often used for wind power, require reactive power for excitation so substations used in wind-power collection systems include substantial capacitor banks for p.f. correction. Since wind speed is not constant, a wind farm's annual energy production is never as much as the sum of the generator nameplate rating multiplied by the total hours in a year. The ratio of actual productivity in a year to this theoritical
maximum is called capacity factor.For example, a 1 MW turbine with a capacity factor of 35% will not produce 8,760 MW·h in a year (1 × 24 × 365), but only 1 × 0.35 × 24 × 365 = 3,066 MW·h, averaging to 0.35 MW.

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