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This paper presents application of UPFC in improving the voltage profile and enhancement of the power system stability. Five bus test system is considered for investigating the effect of UPFC. MATLAB Simulink models of test system and UPFC are developed. In Five bus test system UPFC is incorporated between the bus 1 and 4. Two case studies are taken up; where faults created at two different locations i.e. Bus 4 and 5. For both cases the faults are applied at 1 second and cleared at 1.5 second. Results reveal that, without UPFC, rotor angle oscillations increased in generator and lost synchronism. With UPFC system oscillations damped in 6 seconds and system remained stable. Voltage profile of all 5 buses and rotor angle variations at both generators are analyzed. Thus, it is observed that the stability of system can be improved and voltage profiles flatten significantly with incorporating UPFC.

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