1)Why to say that a capacitor generates reactive power and an inductor consumes it.
2)In power factor correction, does it matter if we place the capacitor close or far from the inductive load?

 

1- Change "power" to "current" in that sentence. A reactive load does not consume power but it causes more current to flow. This extra current causes power to be wasted in the supply lines, transformers and generators due to the resistance of the conductors (I²R).

2- Better to place the power factor correction close to the inductive load to reduce the power loss in the cables between the load and the PFC.

 

if one see the vector of capacitive current being i=E/Z*(-)wt and inductive i=E/Z*(+)wt then it is more than clear that capacitive current flows at the beginning (prior to the time of `nil`, but inductive is flowing with some lazy, short time after the `nil`. But practically there is no difference what had been first, You are free to shake-on the coil and connect it to empty capacitor, or contrary, charge-up the capacitor and connect to innocent coil, or charge both and let them play together. The beginning and end is just mathematical trick to illustrate that current in coil is always later than current in the capacitor.
See, what happens in first moment when empty capacitor is connected to battery? Yes, the battery get the current shock, flows thousands of Amperes which diminishes and stops when capacitor is at last charged up. Yet with coil happens the contrary thing, at first there is very tiny current what increases and increases until coil is making full short-circuit of DC battery. It shows that in capacitor primary flows a current and only then appears voltage, but in coil at first stays voltage and only afterwards grow-up the current.