The objective of this article is to develop and analyse a thyristor-controlled transformer with a fixed capacitor for reactive power compensation in power systems. Reactive power compensation is crucial for enhancing the efficiency and stability of power systems by reducing power losses, improving voltage profiles, and minimizing equipment stress. Traditional compensation methods often rely on fixed capacitors, reactors, or static VAR compensators, but these systems lack the flexibility required for dynamic control of reactive power under varying load conditions. The proposed approach integrates a thyristor-controlled transformer with fixed capacitors, allowing for precise, real-time adjustment of reactive power flow. The novelty of this article lies in the hybrid configuration of the thyristor-controlled transformer and fixed capacitor, which provides a cost-effective and robust solution compared to conventional systems. Unlike traditional methods that depend solely on switching capacitors or reactors, the use of thyristors allows for fine-tuning of reactive power, offering improved performance under variable loading conditions without the need for complex control algorithms. This setup enhances the adaptability of reactive power management, thus maintaining optimal power factor and voltage regulation. The findings from the simulation and experimental results demonstrate significant improvements in power factor correction, voltage stabilization, and reduction in harmonic distortion. The proposed system exhibits a faster response time and greater control accuracy compared to existing compensation techniques. These advantages make the thyristor-controlled transformer with a fixed capacitor a promising alternative for power utilities seeking to enhance the operational efficiency and reliability of their networks. This article contributes to the advancement of reactive power compensation technologies, providing a scalable solution suitable for modern power system.