A power flow controller responsive to power circulation demand for optimizing power transfer is disclosed. When a power flow controller operates at its rated capacity, it can no longer regulate from-bus voltage set-points, line power flow set-points, or both. In such cases, the power flow controller switches to power circulation set-point control without exceeding the rated capacities of the voltage-sourced converters in the power flow controller. Power-voltage (PV) curves associated with voltage stability analysis for maximizing power transfer can be generated and stored for use with a power flow controller operating in automatic power flow control mode.