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Voltage sag is one of the major power quality problem which results in a failure or a mis-operation of end use equipments. Sensitive industrial loads and Utility distribution networks all suffer from various types of outages and service interruptions which can cost significant financial loss per incident. The aim therefore, is to recommend measures that can improve voltage sag. In this paper a method of determining the exact amount of voltage injection required to systematically correct voltage sag with active power injection with the help of energy storage system (ESS) is described. This paper presents the Dynamic Voltage Restorer (DVR) with ESS based PI Controller method to compensate balanced voltage sag. Simulation results show that this proposed method can compensate balanced voltage sag effectively.