The Test Signal Method is adopted to analyze the impact of thyristor controlled series capacitor (TCSC) on sub-synchronous oscillation. The results show that the simulation system takes the risk of Sub-synchronous Oscillation (SSO) while the TCSC is operating in the capacitive region. A supplementary excitation damping controller (SEDC) is used to mitigate SSO caused by the TCSC. A new optimization method which is aimed for optimal phase compensation is proposed. This method is realized by using the particle swarm optimization (PSO) algorithm. The simulation results show that the SEDC designed by this method has superior suitability, and that the secure operation scope of the TCSC is greatly increased.