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This paper, first, develops the reactive power capabilities of wind power generator and then discusses reactive power ancillary services issues related to the wind farms in the electricity market. Presently, the doubly fed induction generator (DFIG) system, with partial rated power electronic converters in the rotor circuit, is the most popular and widely used for the wind power generation due to its several advantages. The strength of the conventional DFIG in power processing, namely direct connection of the stator windings to the PCC, turns out to be a source of weakness in regards to tolerating PCC voltage disturbances. Utilizing, an additional series grid-side converter (SGSC) connected in series with stator winding of DFIG, it is possible to inject voltage into the grid for necessary compensation. This configuration is known as unified DFIG. A complete reactive power capability of unified DFIG is presented in this paper. The various key issues in providing the reactive power ancillary service are discussed.