A compact algorithm based on power analysis for reactive power compensation as well as load balancing through the static var compensator (SVC) in three-phase three-wire system is developed in this paper. The structure of the SVC is thyristor controlled reactors with fixed capacitors (TCR-FC). By the proposed algorithm the required compensation susceptances for each phase of the SVC is obtained from a very simple function of voltage and reactive power signals which are measured from the network. The salient feature associated with the proposed method is that the circuit representation of system load is not required and the load is recognized just by its active and reactive consumptions. The load's type and connection, hence, do not matter and this method is valid for the case of active loads too. The validity and performance of the new approach are analyzed via a numerical example and the obtained simulation results are thoroughly discussed.