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The application of multilevel converters for exciting permanent-magnet machines with low-phase inductance to dc-link voltage ratios facilitates a reduction in high-frequency switching harmonics. However, converter nonlinearities and, in-particular, on-state device voltage drops, create additional low-frequency harmonics. This paper therefore proposes a generic compensation scheme to accommodate the effects of such converter nonlinearities and, in doing so, improve the harmonic quality of the machine phase currents. Experimental results gathered from a prototype five-level diode-clamped converter validate the benefits of the proposed scheme by showing quantitative reductions in low-frequency harmonics.