This digest introduces a comprehensive dynamic model approach to the MMC-based ES-STATCOM controller with effective energy sources and power grid integration. The design of various controller elements is based on detailed harmonic evaluations for both dynamic and steady-state operation modes, which is a significant contribution to the paper. As another novelty to this paper, the design of the circulating current control adds second harmonic computation for the modulation indexes. This approach further improves the converter’s performance by reducing the fluctuation in the capacitor voltages and the losses. Finally, the operating range of the MMC-based ES-STATCOM system is being discussed, which shows enhancement in the efficiency and stability based on the comprehensive control architecture. The functionality of the proposed control architecture is validated through a Real-Time Digital Simulator (RTDS) and Virtex 7-based FPGA controller in a Control Hardware-in-Loop (C-HIL) environment.