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In this work a comparative analysis of the performance of the switched bulk capacitors against the performance of a STATCOM in the reactive power compensation of a standalone three phase reactive power load. The proportional-integral (PI) controlled is Zeigler Nicholas tuned. A set of four bulk reactive power compensating three phase capacitive VAR units are used and a single capacitor or more number of capacitors of resulting VAR values closest to the reactive power demand are connected across the three phase line at the point of common coupling. Then instead of the discrete capacitor bank a PI tuned STATCOM is connected at the point of common coupling and the performance of PI controller is observed. Then these two variants of reactive power compensation are compared and contrasted. The results of the two procedures are quantitatively analyzed. The transient and steady state behavior of the two techniques are studied. The advantages of the use of STATCOM in terms efficiency and drawback of the STATCOM in terms of degraded power quality are compared.