Self Reliance Written by Emerson Translation of Tamil

A UPQC has the same structure as a UPFC. It can inject current in shunt and voltage in series simultaneously in a dual control mode. Therefore it can perform both the functions of load compensation and voltage control at the same time.
The UPQC must also inject unbalanced and distorted voltages and currents and hence its operating characteristics are than that of a UPFC.
Furthermore their operation philosophy is different. The UPQC is also an (PQ) enhancement device. UPFC and can operate under non-balanced conditions, whereas the UPFC is assumed to operate under balanced sinusoidal conditions.
Source: A. Ghosh, G. Ledwich - Power Qualtiy Enhancement using custom power devices (found at google: E-books)

Quality of power supply has become an important issue with the increasing demand of Distributed Generation (DG) systems either connected to the grid through some power electronics grid-tie inverters or to work in isolated (microgrid) mode towards the development of a smart grid network. In this paper a technical review of Integration of Unified Power Quality Conditioner (UPQC) in Distributed Generation Network has been presented. Though the primary task of UPQC is to minimize the grid voltage and load current disturbance along with the reactive and harmonic power compensation, additional functionalities like compensation of voltage interruption and active power transfer to the load and grid have also been identified. Connection methodologies with their pros and cons are also described. Recent improvements in capacity expansion techniques and future trends for the application of UPQC to cope up with the expanding DG capacity are also