The question is based on the concept of demand factor in electrical installations. Let us explore the concept and analyze the options provided to identify the correct answer.

Demand Factor is defined as the ratio of the maximum demand of a system to the total connected load of the system. It is given by the formula:

\text{Demand Factor} = \frac{\text{Maximum Demand}}{\text{Total Connected Load}}

Demand factor is a measure of the utilization of the electrical distribution network. A low demand factor implies that the system's maximum demand is significantly lower compared to the total connected load.

1. Option Analysis:
2. Option 1: "Average electrical load remains equal to maximum system demand continuously"
   • This statement suggests a constant load which does not relate to the demand factor concept. Therefore, this option is incorrect.
3. Option 2: "Connected electrical load is much greater than maximum power demand"
   • This option directly aligns with the definition of a low demand factor, whereby the connected load exceeds the maximum demand, leading to a low utilization of the installed capacity. Thus, this is the correct answer.
4. Option 3: "Maximum electrical demand exceeds total connected electrical load capacity"
   • This scenario is not possible practically, as maximum demand exceeding the total connected load would mean overloading the system. Therefore, this option is incorrect.
5. Option 4: "Individual consumer demands occur simultaneously during system operation"
   • This implies high utilization which would lead to a high demand factor, contradicting the query about low demand factor. Hence, this option is incorrect.

Therefore, the correct answer is: "Connected electrical load is much greater than maximum power demand". This correctly describes the situation represented by a low demand factor in an electrical installation.