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A new hybrid active power filter, composed of passive power filters and active power filter, is proposed for harmonic suppression and high capacity reactive power compensation. A kind of configuration of the hybrid power filter is presented and its basic principle is addressed, also, given in detail are the design of passive power filter and the analysis of injected harmonic current by active power filter. Recursive integral PI algorithm is applied to control the current and it is implemented on a DSP-based controller. Simulation and industrial application results have validated that the system proposed has good characteristic of reactive power compensation and harmonic suppression.