Both electric power companies and electric power users are becoming more serious about the quality of electric power because today's loads (such as personal computers) are more sensitive to quality. Fluctuations in voltage can cause flicker, for example. Loads such as electric arc furnaces and wind turbines can cause voltage fluctuations in the system, and that results in the flickering of lights and televisions. The Fushiki substation in Japan supplies power to arc furnaces. The arc furnaces' input power fluctuates, resulting in a voltage imbalance and flickering. Generally, the owners of the arc furnaces install equipment to reduce the flicker. But for various reasons, a static synchronous compensator (STATCOM) for flicker compensation had to be installed at the substation, far from the arc furnaces. The STATCOM is able to reduce flicker by sensing the load current and outputting reactive power, which cancels out the fluctuation of the reactive power of the load. But compensating for the flicker with the substation equipment is problematic because it can only sense the output current of the substation, not the load current of the arc furnaces. Part of the output current of the STATCOM flows into the load. The STATCOM senses the load current containing the part of its output current. The STATCOM makes the reference signals of its output current by using the sensed value of the load current. In this way, positive feedback is formed in the control system of the STATCOM, which makes the control system unstable and causes current resonance. We succeeded in developing a 20-MVA flicker compensator with a novel control scheme that enables suppression of flicker and at the same time stabilizes the control system. The flicker compensator has been in continuous operation since July 2006 and its compensation ratio of δV10-4, an evaluation measure of flicker, is over 67%. In this paper, we will introduce our flicker compensator and describe the mechanisms that are used to compensate for flicker.