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A kJ class high temperature superconducting magnetic energy storage system (HTS-SMES) composed of YBCO and BSCCO coils with a cryogenic system using sub-cooled LN2 is optimal designed. This SMES is applied for the dynamic power fluctuation compensation considering the quench protection in power system. A dual processor combined with the digital signal processor (DSP) and the micro-programmed control unit (MCU) is proposed to construct a LCL filtered voltage source converter system for the SMES. Based on the SVPWM pulse modulation, the power fluctuation compensation strategy of the SMES and its DSP programs are proposed. Finally, a dynamic simulation test system with this SMES for compensation of power fluctuation is build up and the electric power experimental results show that the SMES can output the required compensation power correctly and restrain the power fluctuation in milliseconds.