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In this paper, an averaged model of circulating current is proposed. Based on the model, the mechanism concerned with the circulating current occurring are explained explicitly. Owing to the circulating current which mainly consists of zero-sequence components varies with different factors such as pulse width-modulation strategies, circuit parameters and so on, therefore a new control variable associated with space-vector modulation is introduced, and then a zero-sequence current loop is designed to control and suppress the circulating current. Furthermore, a parallel inverters system used for wind power application is constructed and then the proposed control method is implemented. Simulation results validate the developed model and the proposed control scheme.