The progression of distributed generation within a bulk power system will lead to the need for greater control of transmission-line power flows. Static synchronous compensators (STATCOMs) provide a power-electronics-based means of embedded control of transmission-line voltage and power flows. The integration of energy storage with a STATCOM can extend traditional STATCOM capabilities to four-quadrant power flow control and transient stability improvement. This paper discusses energy storage systems (ESSs) integrated with conventional and multilevel bidirectional power converters for a hybrid STATCOM/ESS. Conventional, diode-clamped, and cascaded multilevel converter-based STATCOM/ESSs are developed, and their performances for a variety of power system applications are compared using battery energy storage. The advantages and disadvantages of each topology are presented. Both simulation and experimental results are provided to validate the conclusions