One of the most promising alternate sources of energy is wind energy. Energy of the wind is converted to electrical energy in wind farms and is then connected to a weak distribution network to supply local loads. Most wind farms use induction generators for electricity generation. These induction generators draw excessive reactive power for their operation and this causes shortage of reactive power in the system and leads to voltage collapse. This problem is simulated on PSCAD/EMTDC platform. For static compensation, capacitor banks are used and for dynamic compensation, Static Var Compensators (SVCs) are used.