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Wind energy is one of the leading renewable energy technologies for the generation of electricity. Electrical energy may be generated over a wide range of operating conditions, particularly if far more than one windturbine is connected to the network. Low electrical energy production in one part of the windfarm may occur with high production in another part together with highly variable reactive power consumption from the system. A GTO-based Static Var Compensator also called Static Var Generator (SVG) or STATCOM is used in the Rejsby Hede Windfarm in Denmark for dynamic reactive power compensation and voltage limitation when islanding occurs. This paper describes the design aspects and studies, the converter technology and the control and protection schemes of this first application of SVG technology for windfarm operation. The installation will go into operation in 1997.