This paper discusses the integration of a static synchronous compensator (StatCom) with the superconducting magnetic energy storage (SMES) system in damping power oscillations. The performance of the StatCom, a self-commutated solid-state voltage converter, can be improved with the addition of energy storage. In this study, a 100 MJ SMES coil is connected to the voltage source inverter front-end of a StatCom via a dc-dc chopper. The dynamics of real and reactive power responses; of the integrated system to system oscillations are studied using an electromagnetic transient program PSCAD(TM)/EMTDC(TM), and the findings are presented. The results show that, depending on the location of the StatCom-SMES combination, simultaneous modulation of real and reactive power can significantly improve the performance of the combined compensator.