It solves the problem of harmonic current in power system. It also compensate reactive power and balances load on three phase(if load is unbalanced). It uses Clarke transformation to calculate value of p0,p and q, filters out constant part of p and thus finding the compensating part of p0,p and q. Then, it calculates compensating current by inverse-Clarke transformation. The compensating current is injected to the network via three phase inverter using hysteresis band current control(HBCC) method. In this way, harmonic and reactive compnent of load is supplied by this shunt active power filter.Also, compensating p0 means balancing load on three phase.