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Voltage balance issue of dc-link capacitors is very important for applications of a cascade multilevel converter or a modular multilevel converter. In this paper, a novel diode-clamped modular multilevel converter (DCM2C) topology is proposed and a power feedback control method is developed. With the developed control strategy, the proposed diode-clamped circuit becomes a controllable closed loop which enables the capacitor voltages to be clamped by low power rating clamping diodes. The proposed topology and control strategy has quicker response and requires much fewer voltage sensors than the normally used traditional method; therefore, the system performance improvement and cost reduction are expected. Based on the proposed DCM2C, a novel N +1-level cascade multilevel topology is proposed for a cascade active power filter (CS-APF). The simulation and experimental results from the CS-APF have demonstrated and verified the effectiveness of the proposed novel topology and control method.