In this paper, current application and its development of flexible alternating current transmission system (FACTS) are briefly described. Targeting to solve the potential threatens in developing Jiangsu grid, feasibility for application of FACTS to improve system reliability and transfer capacity is investigated. Middle across-Yangtze-river transmission channel, southern-Suzhou system and western-Nanjing inter-city circle grid are set as the examples. The conclusions can be obtained that: with the application of FACTS, power flows in the system can be effectively controlled. The transfer capacity can be obviously improved, and induced voltage unstable problem during the severe faults such as bipolar latched in the ultra-high-voltage direct current (UHVDC) system can be prevented. Application of FACTS can also avoid the huge investment and difficult construction for the new across-river transmission channels and across-city cables. In summary, application of FACTS can prominently improve the efficiency and reliability of the system operation, and better economic and social benefits for the grid can be achieved.