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Most power quality problems in distribution systems are related to voltage sags. Therefore, different solutions have been examined to compensate these sags to avoid production losses at sensitive loads. Dynamic voltage restorers (DVRs) have been proposed to provide higher power quality. Currently, a system wide integration of DVRs is hampered because of their high cost, in particular, due to the expensive DC-link energy storage devices. The cost of these DC-link capacitors remains high because the DVR requires a minimum DC-link voltage to be able to operate and to compensate a sag. As a result, only a small fraction of the energy stored in the DC-link capacitor is used, which makes it impractical for DVRs to compensate relatively long voltage sags. Present control strategies are only able to minimize the distortions at the load or to allow a better utilization of the storage system by minimizing the needed voltage amplitude. To avoid this drawback, an optimized control strategy is presented in this paper, which is able to reduce the needed injection voltage of the DVR and concurrently to mitigate the transient distortions at the load side. In the following paper, a brief introduction of the basic DVR principle will be given. Next, three standard control strategies will be compared and an optimized control strategy is developed in this paper. Finally, experimental results using a medium-voltage 10-kV DVR setup will be shown to verify and prove the functionality of the presented control strategy in both symmetrical and asymmetrical voltage sag conditions.