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We have developed and tested a laboratory scale High-TC Superconducting Magnetic Energy Storage (HT-SMES) system with storage capacity of up to 1.2 kJ. It was designed to improve the power quality for a consumer supplied by 3-phase standard commercial electric power grid at a consumer power of up to 20 kW. This SMES is based on a high-TC superconducting coil with a ferromagnetic core, immersed in liquid nitrogen at 65 K to provide efficient thermal contact with the coolant. We also developed a cryogenic DC-DC converter based on low resistance power MOSFET transistors, providing low losses in the stored energy and high operational efficiency. The power conditioning capability of our HT-SMES was proved, and compensation of voltage drops in the electric grid was successfully demonstrated.