The Modular Multilevel Converter (MMC) has become a preferred topology in HVDC applications due to its full controllability and the huge number of voltage steps. The excellent waveform generation, even at low switching frequencies, makes the MMC also very attractive for medium-voltage applications. In this context, both the converter design and the modulation methods need to be properly studied. Minimum switching frequencies are achieved by appropriate modulation, however, sufficient energy needs to be stored in the capacitors. This is particularly a challenge for STATCOM applications because the stored energy in the system needs to be controlled from the ac grid. In this paper different modulation methods with various capacitor designs are investigated for this application to find an optimum trade-off between capacitor design (investment costs) and switching frequency (operation costs). The appropriate MMC design and operation have been proven by simulation and experimental results showing excellent waveforms without additional filtering.