In this paper, a static var compensator(SVC) using three-level inverter is proposed for high voltage and high power applications. A general and simple model for the overall system is obtained using the circuit DQ-transform and the DC and AC analyses are achieved to characterize the open loop system. A new control algorithm which controls phase angle and modulation index simultaneously is suggested to provide fast system response without independent voltage source. Modeling, analyses and control are verified by computer simulation.