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In this paper, a flexible power supply method for Electric Arc Furnace (EAF) is presented in which Unified Power Flow Controller is used, when considering the impaction in power-grids caused by electric arc furnace systems. The fuzzy algorithm is implemented in the UPFC controller, and the control system of arc furnace is designed. Based on the non-linear time-variable resistance model, the power supply system model with UPFC for arc furnace is established and the simulation study is made by means of MATLAB software. As a result, the power supply system with UPFC for EAF can effectively decrease power voltage fluctuation, flicker, regulate real and reactive power of transmission and also damp oscillation and improve the power supply quality. Furthermore, this paper designs an experiment device of arc furnace, the device adopts advanced DSP chip of TMS320F2812 as a core of the controller.