This paper presents a method to compensate voltage sags with minimum energy injection for a series‐connected voltage restorer using a micro‐SMES. A circuit for extracting the fundamental symmetrical components from sag voltages and a minimum energy injection algorithm is described. Simulations of voltage sag compensation have been carried out using PSCAD/EMTDC for various faults. The simulation results confirm the validity of the proposed method and show the possibility of reducing the size of energy storage devices. © 2002 Wiley Periodicals, Inc. Electr Eng Jpn, 141(3): 70–80, 2002; Published online in Wiley InterScience ( www.interscience.wiley.com ). DOI 10.1002/eej.10047