Cosine of the phase angle difference between current and voltage waveforms in an AC circuit is known as power factor ↗. The value of power factor lies between 0 and 1. It is to be noted that generator and alternators doesn’t have their own power factor. It is the characteristics (nature) of load connected to the generator which defines the power factor of generator. Hence generator and alternators operates at a power factor determined by their loads. Moreover, this is the reason due to which alternators and generators are generally rated in KVA or MVA instead of KW and MW. Let me explain.
KVA or MVA= Volts 
Amps where K and M means 1000 and million times of VA.
KW or MW= Watts= Volts Amps Power Factor.
Or
kW = kVA Power Factor
Since manufacturer doesn’t know what kind of load (i.e. its power factor) is going to be connected to the generator. Hence generators and alternators are rated in apparent power (KVA) instead of active power (Watt).
What is the Power Factor mentioned on the Nameplate of Generator and Alternator?
Electrical loads generally consists of resistive, inductive and capacitive components. In case of resistive loads, power factor is unity. Capacitive loads results in leading power factor while lagging power factor is caused by inductive loads. Since most of the loads in industries are inductive due to the large amount of motors whose power factor is around 0.8. Hence manufacturers generally designed generator sets in such a way that the machine operates at its rated condition with 0.8 lagging power factor. Thus, 0.8 is the most common power factor which you will find on the generator and Alternator’s name plate.
Effect of Power Factor on the Operation of Generator :
Let assume that we have 500 KVA generator with 0.8 lagging power factor on the nameplate. Since active power is Volts x Amps x power factor. This means that generator will deliver 500KVA x 0.8 = 400KW active power at rated power factor. In order to know the effect of power factor on the operation of generator, let assume another generator set which will also supply same active power of 400W at unity power factor.
Since the apparent power of generator set 1 with power factor 0.8 is 400/0.8= 500kVA ( kVA= kW / PF). The apparent power of generator set2 with same active power will be 400/1= 400KVA ( at unity power factor ). Lets find out that what will be the current flowing in both generator sets ?
Case 1:
When the power factor of load is o.8 and assuming 230 volts at its terminals,
As we know,
KVA or MVA= Volts Amps.
Current flowing through generator set1 with power factor 0.8 will be
500 KVA= 230 Amp
2.173 Amps
Similarly, current flowing through generator set 2 with unity power factor will be
400/230= 1.739 Ampere.
It can be seen from the above calculation that both generator sets delivers same active power of 400. However, current flowing through the generator set having unity power factor is less as compared to the other generator with power factor 0.8. Hence current flows in the machine will be high in case of low power factor.
The large currents at low lagging power factor causes excessive voltage drop in alternators and generators. Moreover, although generators and alternators are rated in KVA, but the output of power stations depend on the KW output. The output of power station is 
i.e. No. of units supplied depend on the power factor. This simply means that if the value of power factor is low, more KW has to be supplied by the system. There are also energy losses in the transmission system due to high amount of current. That is why utility companies charge the consumers for running loads of low power factor.
Besides this, there are also other problems that arises when the power factor of machine is below or above the rated power factor (o.8). Since Generator sets is designed for power factor 0.8 along with some other parameters like full load current, voltages, KW or KVA. Hence there are limitations of the machine which needs to be understand by the user. Lets consider the following cases;
Assuming that 500 KVA generator is producing 400 KW active power at rated power factor 0.8. If the power factor of load is raised to unity power factor, the generator set is capable of producing ( 500 1)= 500 kW. However, the prime mover ( Engine or Turbine) is designed to produce 400 KW at rated standard o.8 power factor. Hence it is necessary to increase the HP rating of the engine in order to meet the demand. If the prime mover is capable to produce torque which is equal to 500KW, then the generator can produce 500 KW at unity power factor. In overall, we can say that generator active or real power is limited by the prime mover of generator when the power factor is more than the rated value.
Similarly, if the power factor of load is 0.7 which is less than the rated 0.8 pf. In that case, the generator will produce 500* o.7 = 350 KW ( i.e. less amperage). However, the prime mover was designed to produce 400 Kw by taking o.8 power factor as a standard value. Hence we can say that active power capacity is limited by generator amperage in case of power factor less than the rated 0.8 power factor.
Conclusion:
Industrial loads includes large amount of motors due to which standard rated power factor is o.8 lagging. Generator and alternators doesn’t have their own power factor since it is created by the connected load. If the power factor of connected load is greater than the rated 0.8, the active power output is limited by the prime mover of generator. In case of power factor less than 0.8, the active power capacity is limited by the current rating of the generator windings ( generator amperage ).
That’s all. Hope this will helps you.
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