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This work deals with compensation algorithm schemes used in single-phase Unified Power Quality Conditioner (UPQC), allowing harmonic suppression and sag/swell compensation of the input voltage. In addition, reactive power compensation and harmonic suppression of the input current are also carried out, resulting in an effective power factor correction. Two different operation modes are employed to control the UPQC using Synchronous Reference Frame (SRF) based controllers. In the first mode the series converter acts as a sinusoidal current source, while the parallel converter acts as a sinusoidal voltage source. In the second mode, the series converter acts as a non-sinusoidal voltage source, while the parallel converter acts as a non-sinusoidal current source. A comparative analysis of the two operation modes is made, in which the advantages and disadvantages of each are discussed. Validation results are presented to confirm the theoretical development and performance of the single-phase UPQC.