In real industrial microgrids(MGs)

the length of the primary delivery feeder to the connection point of the main substation is sometimes long. This reduces the power factor and increases reactive power absorption along the primary delivery feeder from the external network. Besides

the giant induction electro-motors as the working horse of industries requires remarkable amounts of reactive power for electro-mechanical energy conversions.To reduce power losses and operating costs of the MG as well as to improve the voltage quality

this study aims at providing an insightful model for optimal placement and sizing of reactive power compensation capacitors in an industrial MG. In the presented model

the objective function considers voltage profile and network power factor improvement at the MG connection point. Also

it realizes power flow equations within which all operational security constraints are considered. Various reactive power compensation strategies including distributed group compensation

centralized compensation at the main substation

and distributed compensation along the primary delivery feeder are scrutinized.A real industrial MG

say as Urmia Petrochemical plant

is considered in numerical validations. The obtained results in each scenario are discussed in depth. As seen

the best performance is obtained when the optimal location and sizing of capacitors are simultaneously determined at the main buses of the industrial plants

at the main substation of the MG

and alongside the primary delivery feeder.In this way

74.81%improvement in power losses reduction

1.3% lower active power import from the main grid

23.5% improvement in power factor

and 37.5% improvement in network voltage deviation summation are seen in this case compared to the base case.