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A method for real-time detection and extraction of individual harmonic and interharmonic components in a power signal with potentially time-varying characteristics is presented. The proposed method, which is based on the concept of adaptive notch filter (ANF), adaptively decomposes the measured power signal into its constituting components independent of where their frequencies are located. The algorithm provides instantaneous values of the various estimated frequency components in addition to the values of their frequencies, amplitudes, and phase angles. The structure and mathematical formulation of the proposed technique, including guidelines for its parameter tuning, are presented and its performance is studied in a variety of scenarios where the power signal attributes, such as fundamental frequency and amplitude, undergo variations over time. This study confirms the desirable transient and steady-state performances of the proposed method. Compared with its recently proposed counterpart, the proposed method of this paper obviates the need for using a phase-locked loop (PLL), and hence, offers a more simplified structure which makes it more attractive from an implementation point of view.