Correct Answer - Option 2 : 0.8
Power factor is defined as the ratio of real power (kW) to apparent power (kVA) in an AC electrical power system.
Power Factor = kW/kVA
Power factor and DG set kVA:
The maximum kVA depend on the rated voltage and current of the generator. Exceeding the kW rating overloads the diesel engine, and exceeding the kVA rating overloads the generator windings, even if the kW output stays below the rated value.
Generator sets are rated in kVA at 0.8 power factor lagging. This 0.8 power factor is not the load power factor.
It is a nominal power factor used to calculate the kW output of an engine to supply the power for a particular alternator kVA output.