STATCOM is the name given to the semiconductor based counterpart of synchronous condenser. Synchronous condenser is actually an unloaded synchronous generator which is used to provide reactive power (both capacitive and inductive) to the network by changing its field excitation. STATCOM is much faster than the synchronous condenser, since it has no moving parts. It consists of semiconductors with turn-off capability, such as GTOs, IGBTs, and IGCTs and passive elements such as inductors, capacitors, and resistors. The use of STATCOM is generally in, but not limited to, reactive power compensation and/or voltage regulation. It can also provide power system stability improvement.

A STATCOM, being nearly in phase with the network, can act as a capacitor (provides reactive power to the grid), when its voltage magnitude is higher than the grid’s. On the contrary, it can act as an inductor (absorbs reactive power from the grid), when its voltage magnitude is lower than the grid’s.

Some of the important benefits of STATCOM are:
  - Low response time, on the order of milliseconds ^*
  - Prevention of transient currents and voltages
  - Lower disturbance in the network
  - Can provide both inductive and capacitive reactive power
  - Independent three phase operation
  - Current is not dependent on grid voltage magnitude

^* This feature is especially important for rapid changing inductive loads such as welding machines, furnaces, etc.