This paper deal with development of on-line type voltage sag compensation system using supercapacitor EDLC to solve the voltage sag problems which are considered to be dominant disturbances affecting the power quality. With the wide use of semiconductor devices in electrical equipment, modem-type loads are becoming increasingly sensitive to the voltage sags and the disturbances prove to be costly to industries. Supercapacitor EDLC is employed to compensate dynamically for the voltage sag of system with sensitive loads. This capacitor has higher energy density than the electrolytic capacitor. Also, this capacitor has a lot of advantage such as no maintenance, longer life cycle and faster charge-discharge time than the battery system. Therefore, in this paper, the energy design scheme of supercapacitor and the configuration technique of on-line type voltage sag compensation systems are newly introduced. According to the results of experimental of prototype 5[kVA] system, it is verified that the developed system has effectiveness of voltage sag compensation by using a supercapacitor EDLC.