what i think is that if reactive power is more drawn from a line than compensated then its true voltage profile deteriorate and undervoltage relay may trip.
but how does it cause overvoltage on other lines it leads to? reply
and reactive power output of a generator if decreased then its pf improved so it can give more active power but only when it is required by load so current in wire increased but the cables we made to carry that already designed for even 120% of system reactive power output considering unity pf so its not exceed that limit.
moreover i suppose insulation cannot be damged by high current for transmission lines case only the cable may get overheat and that heat can be dissipated in environment in case of overhead cable
though i agree with insulation damage in case of underground line to some extent.

Thanks for replying...!!!

I have a 6 mw plant and what we do there is that we try to keep power factor at unity resulting in minimum reactive power.
1. Reactive power is generated in both cases , if your pf goes inductive as well as capacitive.
2. What happens when it goes inductive is that voltage starts leading the current . A highly inductive reactive power results in overvoltage trip of machines.
3. What happens in capacitive pf is vice versa , current leads the voltage and a high capacitive reactive power can lead to undervoltage trip.
And for your second question

if reactive power will reduce that will lead to more generation of active power that will increase in the current which will create failure of insulation like problem ultimately tripping of power plant.

All electrical equipment are designed to be working on a power factor of .85 (citation needed). and if they work on unity power factor , its marvellous. Unity power factor means 100% active power .And that means full load current can be achieved. Plus to that the equipment and cables are rated for much higher capacity than the { Full load current+ 25%overload current}. So no chance of failure.
Only short circuit conditions causes insulation deterioration in cables as per to my knowledge. I dont know what system exactly you are working on but i tried my best on my end.

Hope this satisfies you.

Yes this time, I got my answer.

Thanks

Vibhor Mittal