It is important part in Synchronous Generators; it controls the output voltage of the generator by controlling its excitation current. Thus it can control the output Reactive Power of the Generator.
AVR increases or decreases exciter current for a more linear voltage and frequency.
It is a device used to maintain a constant voltage at the Alternators terminals. It functions by maintaining the Excitation required maintaining the terminal voltage of the Alternator with change in the load.
Increase in excitation voltage increases reactive volt-ampere (KVAR) which decreases power factor (cos (φ)).
Generally, voltage (V) of the alternator is kept constant so the rest of the components in VICos (φ), i.e. I and Cos (φ) have to vary according to the load.
Increase in I causes decrease in Pf and Decrease in I causes increase in Pf. so it is clear that Excitation V is proportional to KVAR and load current (I) and inversely proportional to power factor Cos(φ)) Increase in excitation voltage increases reactive volt-ampere (KVAR) which decreases power factor (Cos (φ)).