I have done two island mode plants, 6 2MW units and 4 2.5MW units where we had to add capacitor banks for correction.
Both site were large construction sites, first a dam project in SoCal with VERY strict emissions requirements. The contractor liked to oversize motors, we had an N+2 plant, we could add more capacity to deal with the poor power factor, except our emissions controls on the engines did not work as well as needed (both DPF's and SCR's were required). We installed an automated 12kV cap bank with 4 MVAR capacity in 500kVAR steps, cap bank automation was done by PLC managaing load demand start/stop for plant. Plant was in operation for 2.5 years.
Second plant was the 4 2.5MW 480 units at a large excavation for a government project that lasted 3 years, also had very strict emissions requirements and same problems, used same type solution but got by with a smaller cap bank on that job.
In both cases the centrally controlled cap banks solved our operational problems and allowed for best possible engine efficiency and lowest emissions.
On the second site the intial attempt was to use local cap banks at certain poor power factor loads. On that job we were not responsible for the primary distribution, only know they had problems and the contractor asked us to apply the system cap banks after about 2 months of their mitigation attempts.
I can provide further details if needed on the dam project, on the second project I'm bound by an NDA.
Hope that helps, Mike L.