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This paper deals with the voltage sag mitigation for a fixed sensitive load by using a Dynamic Voltage Compensator (DVC) connected to the distribution system. DVC consists a power electronic controller, protecting critical loads from disturbances occurring in the supply system and regulating the load voltage against any sag in the supply. The proposed work is confined to balanced sinusoidal systems and unique in not using any transformations to generate the reference voltage. The steady state analysis is considered and the simulation results are presented in MATLAB / SIMULINK. A simple digital feedback control algorithm is formulated using the digital signal processor (DSP) TMS320LF2407. The reference voltage is determined based on the output voltage of suitably designed LEM voltage sensors, leading to simple hardware with reduced computation. The reference signals are tracked using a fixed hysteresis band control and the DVC is realized using three single phase voltage source inverters (VSI).