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I. Voltage source inverter (VSI): It is a power electronic system consists of switching devices (IGCTs, IGBTs, GTOs), which can generate a sinusoidal voltage at any required frequency, magnitude, and phase angle. It converts dc voltage to ac to regulate the load.

II. Voltage injection transformer: This transformer connects the DVR to the distribution feeder and couples the injected compensated voltage to the incoming supply voltage. The AC voltage supplied by VSI is stepped up by using injection transformer to the desired voltage level. It is either connected in star or delta winding. The amount of voltage sag/swell compensated by DVR depends upon the rating of injection transformer and inverter

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III. Output filter: It removes out the harmonics contained in the output of the VSI. It can be kept either at the inverter side or at the HV side of the transformer. If filter is placed at the inverter side, switching harmonics are prohibited to enter the injection transformer thereby reduces rating and voltage stress on it.

IV. Energy storage unit: It provides the required real power to generate compensating voltage. Energy storage devices can be lead acid batteries, flywheels, dc capacitors, super capacitors and dc voltage source. Its capacity has great effect on compensation capability of DVR. The system with large disturbance requires real power compensation.

V. Control unit: Control circuit steadily monitors the system. Its function is to detect any disturbance or faults in the system. Then it compares the distorted voltage with reference voltage and generate the switching command signals for VSI in order to generate the compensating voltage by DVR