Reactive power problems usually occur at the interconnection points of different systems or now in the deregulated market between different owners of transmission or distribution networks, reactive power generators and consumers. As reactive power is a local product its value to system security and voltage control very much depends on the location in the system. STATCOM is a device that regulates the voltage level or the reactive power in the system. It is used to maintain voltage stability, enlargement of critical clearing time. In this paper Simulation has been done with one example