Abstract: This study proposes a hybrid STATCOM/BESS system integrating battery storage to overcome conventional STATCOMs' reactive power limitation. The topology enables simultaneous active/reactive power regulation for four-quadrant compensation while maintaining inherently stable DC-link voltage without auxiliary controls. Operational principles are modeled mathematically, with d-q current decoupling and PI tuning criteria ensuring power independence. Simulations validate superior dynamic and steady-state performance.