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In this paper, the operation of shunt-connected voltage source converters under unbalanced voltage conditions is investigated. The attention focuses on voltage dips, thus on transient operation. The importance of using a fast and accurate method for detection of sequence components of the grid voltage affected by a fault is emphasized. Four different sequence-detection techniques are presented and compared on the basis of their transient response. Three different current controllers for VSCs are implemented and compared in both cases of constant and regulated DC-link voltage. In the latter case, the corresponding DC-link voltage controllers are described. The operation of the VSC equipped with the different current controllers is analyzed with constant-power and fluctuating-power loads. Results obtained with different type of loads demonstrate that the optimal choice of the controller depends on the expected application.