How does a capacitor improve electrical system performance?

A capacitor enhances electrical system performance primarily by storing and releasing electrical energy. This ability is crucial for smoothing out fluctuations in electrical supply, especially in AC circuits. When there are surges in voltage, the capacitor can absorb the excess energy and then release it back into the circuit when there is a drop in voltage. This function helps maintain a steady voltage level, reduces electrical noise, and improves overall circuit stability.

By holding charge, capacitors can also provide energy during brief periods when the electrical demand exceeds the supply, which is especially important in applications like power conditioning and voltage regulation. This quality also plays a key role in timing and filtering applications within circuits, aiding in the proper performance of many electronic devices.

The other options relate to different functions that components in an electrical system perform, but they do not directly describe the fundamental role of a capacitor in improving performance through energy storage and release.