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A method is presented by which the harmonic current in a two-level, network-connected inverter can be controlled for use as an active filter in addition to supplying real power, via the intermediate DC link to a motor inverter. With the use of variable speed drives incorporating sinusoidal rectifiers there exists the possibility that the PWM-modulated voltage of the sinusoidal front end, or network rectifier, could be modulated to inject harmonic current into the network. This would allow compensation of harmonic voltage distortion caused by other nonlinear loads already connected to the busbar. The use of a commercially available variable speed drive with sinusoidal rectifier is described which, from the distorted busbar voltage, derives the correct current references with which to compensate for 5th- and 7th-harmonic voltage distortion. The method by which the harmonic current references are determined and the method by which they are controlled is presented in detail. The concept of using mains voltage distortion at the point of common coupling as feedback is justified.