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In this paper we investigate the effects of superconducting shielded core reactor (SSCR) on the operation of induction generators. Large number of induction generators used in wind power plants generally increase the short circuit current level of the system. The reason is that they provide parallel reduced-impedance paths for the fault currents. Taking advantage of SSCR in wind power plants allows for using these generating units in large numbers with no concerns about the system fault current increments. The study is performed on a test system using the conventional model of an induction generator and a new effective model for SSCR based on its shielding behavior. Mathematical equations are discussed in detail and the associated SIMULINK model is presented. Computer simulation examines the effectiveness of SSCR in reducing the fault current level as well as provision for transient stability without affecting the normal operation of the system.