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Superconducting Magnetic Energy Storage (SMES) which is characterized by its highly efficient energy storage, quick response, and power controllability, is expected to contribute to the transient stability of power system. The energy function approach is frequently used as a convenient way to control or analyse the power system. Based on the dynamic characteristic of SMES, the interaction between the SMES and the power system is analysed. According to the additional damping provided by SMES, energy function based control strategy is designed to improve the transient stability of power system. Then, the functional range of the SMES power control is analysed, which can be utilized to optimize the allocation of SMES in power system. Simulation tests are performed to evaluate the performance of the proposed energy function based control method.