A fundamentally new circuit of a static thyristor compensator based on a controllable shunting reactor of a transformer type (CSTTR) is described. It is shown that, when a large capacitor or a capacitor bank is connected to the compensating winding of the CSTTR (in parallel with the higher harmonic filters), and when the control winding of the CSTTR is opened or the thyristor control angles are close to 180°, the CSTTR operates as a source of reactive power.