The capacitor (also called a condenser), is a self contained unit which is connected electrically in parallel with the contact breaker.
It is made up of two "plates" constructed from narrow strips of aluminum foil which are insulated from each other by a special waxed paper, called a "di-electric." The plates and insulating paper are rolled up tightly together and sealed in a metal can by crimping the end over onto a gasket.
A spring in the base forces the plates and insulation against the gasket to keep out moisture. One plate is connected to the capacitor case and, through its retaining screw, to ground. The other plate is connected to the external connecting lead.
One of the drawbacks of the process is the interruption of current in the primary coil generates an inductive back-voltage, called "Back EMF", in the coil which tended to cause sparking across the points. This process is corrected by the fitment a capacitor across the contacts so that the voltage surge will charge the capacitor rather than cause destructive sparking across the contacts.
The capacitor has the capacity of raising the peak output voltage and increasing the secondary voltage rise time. This can lead to increasing the amount of electrical energy transferred to the spark plugs. A problem could develop if the coil secondary voltage rises too quickly, excessive high frequency energy can be produced. This generated energy can be then lost into the air-waves by electro-magnetic radiation from the ignition wiring instead of going to the spark plugs where it was intended to go.
Summary
The voltage output of the ignition system and coil can charge a capacitor to up to 150 to 300 volts, depending on engine rpm.
When required, the stored voltage in the capacitor is released to the primary side of the Ignition Coil it can generate an output around 20,000 to 30,000 volts to the spark plug.
Source: CDX Global & Wikipedia - en.wikipedia.org
