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When a squirrel cage induction type wind electric generator (WEG) is connected to power grid, due to variations in load and wind speed, there will be fluctuations in the grid voltage. In this paper, the effect of load and wind speed variations on real power supplied and reactive power consumed by the WEG as well as voltage on the grid are studied. The voltage variation in the grid is controlled by reactive power compensation using shunt connected static VAR compensator (SVC) comprising thyristor controlled reactor (TCR) and fixed capacitor (FC). The TCR is operated automatically by a fuzzy logic controller (FLC). The complete system is modeled using MATLAB SIMULINK. Results show an appreciable improvement in the grid voltage by compensating the reactive power.