Herein a reactive-power control scheme for an isolated wind-diesel hybrid generation with an induction generator (IG) for extraction of wind power and a synchronous generator (SG) for diesel-generator (DG) is presented. The reactive power consumed by IG and load is supplied by the Static Synchronous Compensator (STATCOM). Terminal voltage deviation is controlled by the STATCOM and thereby balances the reactive power. To optimize the PI controller adopted in the STATCOM, Teaching Learning Based Optimization (TLBO) and its modification: opposition based TLBO (OTLBO) has been used for minimizing integral time square error (ITSE). The mathematical model of the reactive-power-flow is presented. The parameters of the algorithm are set. The performance of OTLBO and TLBO is compared with Grey Wolf Optimizer (GWO), where OTLBO excels in all respect. The transient responses of the isolated system are also revealed for 1%, 5% and 20% step change in load reactive power for optimal STATCOM controller. The eigen-value analysis shows improvement in stability by the designed controllers. With the fitness function considered and rigorous optimization of the controller, the settling of the transient was possible within less than half of the time taken in earlier studies.