Abstract: A Power quality problem is an occurrence manifested as a nonstandard voltage, current or frequency that results in a failure or a mis-operation of end user equipments. Utility distribution networks, sensitive industrial loads and critical commercial operations suffer from various types of outages and service interruptions which can cost significant financial losses. With the restructuring of power systems and with shifting trend towards distributed and dispersed generation, the issue of power quality is going to take newer dimensions. In developing countries like India, where the variation of power frequency and many such other determinants of power quality are themselves a serious question, it is very vital to take positive steps in this direction. The present research is to identify the prominent concerns in this area and hence the measures that can enhance the quality of the power are recommended. This research describes the techniques of correcting the supply voltage sag, swell and interruption in a distributed system. At present, a wide range of very flexible controllers, which capitalize on newly available power electronics components, are emerging for custom power applications. Among these, the distribution static compensator (D-STATCOM) and the dynamic voltage restorer (DVR) are most effective devices, both of them based on the VSC principle. A DVR injects a voltage in series with the system voltage and a D-STATCOM injects a current into the system to correct the voltage sag, swell and interruption. Comprehensive results are presented to assess the performance of each device as a potential custom power solution.