This paper describes a laboratory model of a wind energy conversion scheme (WECS) using conventional cage rotor type induction motor of 3Hp, 3-Ø, 415V, 4.9A, 1440 rpm. A 220V, 20A separately excited motor coupled with the induction motor emulates the wind turbine characteristics. A 3-Ø, 415 V capacitor bank of 150μF is connected in each phase across the stator terminals of the machine for its self-excitation. As soon as rotor speed exceeds synchronous speed of the machine, it will generate electrical power and reach its rated value. This arrangement is called as self-excited induction generator (SEIG). To control the frequency of generated voltage, load-balancing technique is considered by using a three-phase diode rectifier powering to an additional load (dump load) through a d.c chopper circuit. Static reactive volt-ampere compensator (STATCOM) is used to mitigate the load reactive power requirement indeed magnetic reactance changes in the machine. Owing to cost optimization of STATCOM, additional reactor is connected across the stator terminals of the SEIG. Simulation study is completed using power system toolbox Matlab / Simulink version9.0. Experimental and simulation results are presented.