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The main aim of this paper is to improve the dynamic control performance of power systems, using an advanced control approach for Unified Power Flow Controllers (UPFC). The proposed controller, based on sliding mode control technique, guarantees fast response times, precise control actions and an almost completely decoupled active and reactive power control. To reduce energy storage equipment, with consequent reduction of power losses and lifetime increase of UPFC systems, AC-AC converters with minimum storage requirements are used. These converters, usually known as Sparse Matrix Converters, are based on Matrix Converter technology and guarantee AC/DC and DC/AC conversion without the intermediate bank of capacitors, present in most AC/DC - DC/AC converters association. UPFC model is presented, using Sparse Matrix Converters, and the system controllers are designed to allow both a good steady-state and dynamic response.