Capacitors placed appropriately stabilizes Voltage.

Capacitors and reactive loads exchange this reactive power back and forth. This benefits the system because that reactive power (and extra current) does not have to be transmitted from the generators all the way through many transformers and many kilometers of lines. The capacitors can provide the reactive power locally. This frees up the lines to carry real power, power that actually does work. Capacitors performs well with reactive loads, but performs adversely with Harmonic load.