The large-scale construction of long-distance, high voltage level transmission projects and sustained load demand increase negatively influence transient voltage stability. A certain amount of dynamic Var compensation at the receiving end of the power grid can significantly improve the stability. Most new energy power plants, such as wind power, and photovoltaic generation, have installed dynamic Var compensation devices. The potential for safety and stability control should be fully exploited. In this paper, it is concluded that the critical fault clearing time is the main index to measure the transient voltage stability of the system, and the critical fault clearing time has been extended by allocating dynamic Var compensation. According to these conclusions, a method for optimal allocation of dynamic Var compensation to improve critical fault clearing time is proposed. The method has determined the optimal capacity and the installation point. The effectiveness of the proposed method is illustrated through simulations on the actual power grid.