Abstract
The paper presents a fundamental analysis of the application of static VAr compensators (SVC) for stabilizing power systems. Basic SVC control strategies are examined in terms of enhancing the dynamic and transient stabilities, improving tieline transmission capacity and damping power oscillations. Synchronizing and damping torque contributions of the SVC are determined for different controls. The analysis is supplemented by digital simulations for a simple practical example. Deficiencies of available control policies are demonstrated and a new concept, based on optimal control, is developed.

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