The use of staged reactive power compensation banks such as Plain Capacitors, or Harmonic Filters, or TSC provides a flexibility of reactive power supply to match the demand of load. However in some cases, using a smooth transition between different levels of reactive power would be a more convenient way. The Thyristor Controlled Reactor comes up as a controllable inductive reactive power source at this point. It consists of inductors in series with thyristors as switches.

Since most of the industrial loads are inductive, reactive power compensation is almost always achieved by supplying capacitive reactive power in parallel with the load. Nevertheless, inductive compensation may sometimes be needed. More importantly, using TCR in parallel with fixed (not switched in and out frequently as in the case of conventional compensation or harmonic filters) harmonic filter, assures gaining control on the amount of reactive power to be released by the compensation system. This amount is controlled by varying the firing angles of the thyristors according to the need of load. For the use of TCR together with harmonic filters, which is the common practice, see SVC.