In electrical engineering, a flexible alternating current transmission system (FACTS) is a family of power-electronic based devices designed for use on an alternating current (AC) transmission system to improve and control power flow and support voltage. FACTS devices are alternatives to traditional electric grid solutions and improvements, where building additional transmission lines or substation is not economically or logistically viable.

In general, FACTS devices improve power and voltage in three different ways: shunt compensation of voltage (replacing the function of capacitors or inductors), series compensation of impedance (replacing series capacitors) or phase-angle compensation (replacing generator droop-control or phase-shifting transformers). While other traditional equipment can accomplish all of this, FACTS devices utilize power electronics that are fast enough to switch sub-cycle opposed to seconds or minutes. Most FACTS devices are also dynamic and can support voltage across a range rather than just on and off, and are multi-quadrant, i.e. they can both supply and consume reactive power, and even sometimes real power. All of this give them their "flexible" nature and make them well-suited for applications with unknown or changing requirements.

The FACTs family initially grew out of the development of high-voltage direct current (HVDC) conversion and transmission, which used power electronics to convert AC to direct current (DC) to enable large, controllable power transfers. While HVDC focused on conversion to DC, FACTS devices used the developed technology to control power and voltage on the AC system. The most common type of FACTS device is the static VAR compensator (SVC), which uses thyristors to switch and control shunt capacitors and reactors, respectively.

When AC won the war of the currents in the late 19th century, and electric grids began expanding and connecting cities and states, the need for reactive compensation became apparent. While AC offered benefits with transformation and reduced current, the alternating nature of voltage and current lead to additional challenges with the natural capacitance and inductance of transmission lines. Heavily loaded lines consumed reactive power due to the line's inductance, and as transmission voltage increased throughout the 20th century, the higher voltage supplied capacitive reactive power. As operating a transmission line only at it surge impedance loading (SIL) was not feasible, other means to manage the reactive power was needed.

Synchronous Machines were commonly used at the time for generators, and could provide some reactive power support, however were limited due to the increase in losses it caused. They also became less effective as higher voltage transmissions lines moved loads further from sources. Fixed, shunt capacitor and reactor banks filled this need by being deployed where needed. In particular, shunt capacitors switched by circuit breakers provided an effective means to managing varying reactive power requirements due to changing loads. However, this was not without limitations.

Shunt capacitors and reactors are fixed devices, only able to be switched on and off. This required either a careful study of the exact size needed, or accepting less than ideal effects on the voltage of a transmission line. The need for a more dynamic and flexible solution was realized with the mercury-arc valve in the early 20th century. Similar to a vacuum tube, the mercury-arc valve was a high-powered rectifier, capable of converting high AC voltages to DC. As the technology improved, inverting became possible as well and mercury valves found use in power systems and HVDC ties. When connected to a reactor, different switching pattern could be used to vary the effective inductance connected, allow for more dynamic control. Arc valves continued to dominate power electronics until the rise of solid-state semiconductors in the mid 20th century.

As semiconductors replaced vacuum tubes, the thyristor created the first modern FACTs devices in the Static VAR Compensator (SVC). Effectively working as a circuit breaker that could switch on in milliseconds, it allowed for quickly switching capacitor banks. Connected to a reactor and switched sub-cycle allowed the effective inductance to be varied. The thyristor also greatly improved the control system, allowing an SVC to detect and react to faults to better support the system. The thyristor dominated the FACTs and HVDC world until the late 20th century, when the IGBT began to match its power ratings.

The basic theory for how FACTs devices affect the AC system is based on analyzing how power transfers between two points in an AC system. This is particularly relevant to how an AC electrical grid functions, as the grid has numerous nodes (substations) that lack sources (generators) or loads. Power flow must be calculated and controlled at each node (substation bus) to ensure the grid design and topology itself does not prevent generated electricity from reaching loads, as when Transmission Lines reach dozens to hundreds of miles in length, they add significant impedance and voltage drop to the system.