This paper presents a novel stabilization FACTS-based scheme that acts as a switched compensator for grid-connected wind energy systems. It is a member of a family of devices and switched dynamic voltage stabilization converters that were developed to ensure minimal loss of excitation, voltage stabilization, energy efficient utilization, power quality enhancement and harmonic distortion reduction in AC distribution grid networks. A novel-dual action distributed FACTS based–switched power filter compensator (SPFC) scheme is developed for efficient utilization of wind energy under varying wind conditions and major load excursions. A dynamic multi-level error-driven decoupled time de-scaled multi regulation control strategy is used to guarantee better power quality performance in terms of voltage enhancement and stabilization of the AC buses, improvement of power factor, and harmonic distortion reduction. The proposed SPFC was controlled using an inter-coupled weighted modified proportional-integral-derivative (WM-PID) controller. Cuckoo search (CS) optimization algorithm is employed to get the PID controller gains in terms of variations and excursions in wind speed and dynamic load excursions to reflect the performance of the compensator scheme. The effectiveness of the proposed SPFC with the multi-level control strategy has been assessed by time-domain simulations in Matlab/Simulink environment. The results obtained show the robustness of the proposed topology.