Power electronics systems are non-linear systems, which consume more reactive power and also the loads they feed are mostly inductive loads which leads to a poor power factor. Various compensation techniques are available to bring the power factor
nearer to unity. In this paper, a novel compensator is proposed, where in-phase and quadrature components of the supply current are vector-controlled. Implementation of this compensator in a power electronic system operating with a very poor power factor (and
hence high THD), shows that the system then draws a leading current. A conventional power electronic system, A conventional power electronic system with one of the traditional static VAR compensators and the conventional power electronic system incorporated with the proposed compensator are simulated and the simulation results are obtained. It is shown that the proposed method offers only 0.7% THD, which also implies that the power factor is improved.