Abstract: The paper analyzed and compared dynamic response time and harmonic characteristics of thyristor controlled reactor type static var compensator and static var generator, and got a conclusion that static var generator has quicker dynamic response speed and lower harmonic content. It did simulation research of static var generator applied in wind power system at normally running time and three-phase grounding short-current fault time separately. The simulation results showed that static var generator can reduce transmission line loss and restrain voltage fluctuation and flicker of the coupling when wind power system runs normally and enhance low voltage ride through ability when short-current fault happens. It also simulated three-phase grounding short-current fault by cutting off 330 kV PT air switch of terminal board of static var generator in a wind power system, and got a result that the static var generator can achieve the maximum capacitive reactive output in a short time so as to improve stability of power grid.