In this paper, a novel global harmony search algorithm (NGHS) is used to determine the optimal location and size of shunt reactive power compensators such as shunt capacitors, static Var compensators (SVCs), and static synchronous compensators (STATCOMs) in a transmission network. The problem is decomposed into two subproblems. The first deals with the optimal placement of shunt Var compensation devices using the modal analysis method. The second subproblem is the optimization of the load flow using the NGHS algorithm. A multi-criterion objective function is defined to enhance the voltage stability, improve the voltage profile, and minimize power loss while minimizing the total cost. The results from a 57-bus test system show that the NGHS algorithm causes lower power loss and has better voltage profile and greater voltage stability than the improved harmony search algorithm (IHS) and particle swarm optimization (PSO) techniques in solving the placement and sizing problem of shunt Var compensators. Finally, a comparison of the convergence characteristics of three optimization methods demonstrates the greater accuracy and higher speed of the proposed NGHS algorithm in finding better solutions compared with PSO and IHS.