Abstract: This paper analyzes the traditional capacitor configuration and control methods and existing problems in urban and rural power grids. The practical method for optimizing capacitor configuration and control in urban and rural power grids is local compensation and joint control using TSC and MCR-based SVC (MCR based-SVC) to achieve hierarchical operation of reactive power in 110(66)/35/10/0.4(0.22)kV power grids. After the huge investment in the renovation of urban and rural power grids, the structure has become more reasonable, the capacitor capacity has increased, and the voltage qualification rate of reports has improved. However, its voltage regulation and loss reduction benefits have not been fully realized because the capacitor configuration is unreasonable, the capacitor control is inadequate, and it is still off-site reactive power compensation. The urban and rural power grids have not optimized reactive power flow. Using TSC and MCR based-SVC for joint control of reasonably configured capacitors can basically achieve hierarchical control of reactive power in 110(66)/35/10/0.4(0.22)kV power grids in urban and rural power grids, so as to achieve the purpose of voltage stability and low line loss. 1. Local Reactive Power Balancing at Nodes Figure 1 shows the voltage-reactive power characteristic curves of a 10kV bus in a power grid. Q[sub]f[/sub] is the power supply characteristic curve, and Q[sub]fh1[/sub], Q[sub]fh2[/sub], and Q[sub]fh3[/sub] are the load characteristic curves. The intersection point 1 of Q[sub]fh1[/sub] and Q[sub]f[/sub] corresponds to the high-quality voltage U[sub]1[/sub]. When the reactive load of a 0.4kV user increases, there are three scenarios in which U[sub]1[/sub] remains unchanged. ① Local compensation at the user. Local balancing on the 0.4kV side of the user transformer, with unchanged reactive loads on the 0.4kV and 10kV lines, and unchanged intersection point 1 and Q[sub]f[/sub], is the best approach. Impulsive loads should be compensated using MCR-based-SVC. ② Compensation on the 10kV bus in the substation. Compared with local compensation by users, the 10kV line increases reactive load, which is worse than local compensation. ③ Transferring to the 110kV grid for compensation. Reducing the turns ratio of the 110/10kV transformer and transferring △Q[sub]fh1[/sub] to the 110kV grid for compensation is equivalent to shifting the Q[sub]f[/sub] curve upward to intersection point 4, which is the worst method. 2. Traditional capacitor configuration methods and their problems Table 1 and Figure 2 show the traditional capacitor configuration methods for urban and rural power grids. The problems are: because the user's cosφ≠1.0 and the configuration is unreasonable, the reactive power of the 0.4kV grid is supplied to the 10kV grid, the reactive power of the 10kV grid is supplied to the 110kV grid, and the reactive power of the 110kV grid is supplied to the 220kV grid (arrow direction), resulting in large voltage drop and high line loss. 3. Optimal Configuration and Operation of Capacitors in Urban and Rural Power Grids To maximize the technical and economic benefits of the upgraded urban and rural power grids in terms of voltage regulation and loss reduction, it is essential to optimize the configuration and control of capacitors. This ensures the grid operates under optimized power flow, with minimal reactive power flow over shortest distances, resulting in minimal voltage drops and line losses. The optimal configuration and operation of capacitors in urban and rural power grids is a discrete, nonlinear, comprehensive planning problem involving capacitor installation location, installed capacity, and operational capacity. Conventional solutions include linear programming and nonlinear programming, but to date, no algorithm has been found that can obtain both a globally optimal solution and a sufficiently fast convergence speed. A practical method for optimizing the configuration and operation of capacitors in urban and rural power grids is to configure capacitors according to the principle of local reactive power compensation. This involves using thyristor-switched capacitors (TSCs) and magnetically controlled reactors (MCR-based SVCs) for joint control based on the principle of reactive power stratification, effectively managing the reactive power stratification balance of the urban and rural power grids (110/10/0.4kV). That is, by using TSC, the reactive power on the high-voltage side of the 10kV transformer is basically 0 (or slightly sent out); by using MCR based-SVC to control the 10kV bus capacitor of the 110/10kV substation, the real-time reactive power on the high-voltage side of the 110kV transformer is accurately controlled to be half of the sum of the excess reactive power of the bus connection line, and the excess reactive power is balanced in the substation without passing through the grid. (1) Optimization configuration method of capacitors The principle of reactive power compensation in urban and rural power grids is: comprehensive planning, reasonable layout, decentralized compensation, and local balance. The reactive power compensation methods in urban and rural power grids are: a combination of centralized compensation and decentralized compensation, with decentralized compensation as the main method; a combination of high-voltage compensation and low-voltage compensation, with low-voltage compensation as the main method; a combination of voltage regulation and loss reduction, with loss reduction as the main method. Table 2 is an explanation table of the optimized configuration of reactive power compensation in urban and rural power grids. (2) Voltage regulation function of TSC and MCR based-SVC ①TSC. Thyristor-controlled low-voltage parallel capacitor banks have relatively small individual capacitor capacities and relatively smooth regulation. Theoretically, they can be switched frequently if zero-crossing switching is possible. The response time is selected according to the rate of change of reactive load, and single-phase, three-phase, and hybrid compensation are available. Capacitors can be controlled based on reactive power, power factor, and voltage. TSCs are installed on the 0.4kV side of the distribution transformer to dynamically compensate for the insufficient reactive power compensation of users and the reactive power loss of the 10/0.4kV transformer. It is best to control the capacitors with the target Q0 on the 10kV side of the transformer as the target, so that the reactive power of the 0.4/0.22kV grid can achieve self-balance. If compensation for reactive power loss of the 10kV line is considered, a slight backfeed of Q on the 10kV side of the transformer can be considered. ② MCR based—SVC (Figure 3). A static var compensator based on a magnetically controlled reactor is a smooth, continuous, and dynamic reactive power compensation device that can provide capacitive or inductive compensation, with a response time of up to 10ms. It is suitable for power grid optimization, reactive power voltage control, and compensation for dynamic reactive loads such as electric arc furnaces, electrified railway traction substations, steelmaking, and rolling mills. The fixed capacitor section can also be made into a filter. The MCR-based-SVC is installed on the 10kV side of a 110kV substation (or a 110kV high-voltage dedicated user) (Figure 2). The control objective is to inject optimized reactive power values ​​into the 110kV side under 110kV voltage constraints, compensating for the insufficient compensation of the 10kV power grid by the TSC, controlling the reactive power self-balancing of the 10kV power grid, preventing it from being transmitted from the 110kV power grid, and preventing excess reactive power from the 110kV power grid (during off-peak load periods) from entering the 10kV power grid. 4. Transformer Tap Adjustment Principles The adjustment of any transformer tap should follow the principle of local (layered) reactive power balancing. 5. Comparison of Advantages between MCR-based-SVC and TCR-based-SVC Table 3 compares the characteristics of MCR-based-SVC and TCR-based-SVC. 6. Conclusion Traditional capacitor configuration and voltage regulation methods worsen reactive power flow in urban and rural power grids and increase line losses. The optimal voltage regulation method for urban and rural power grids involves configuring capacitors according to the principle of local compensation, and using TSC and MCR-based SVC for regulation to achieve local (hierarchical) reactive power balance in the 110/10/0.4kV power grid, thereby improving voltage quality and reducing line losses.