This paper presents the compensation tasks performed by a shunt active power filter, including compensation of harmonic currents, reactive power, and an unbalanced load current. The paper demonstrates novel control of the shunt active power filter in a closed-loop system. The control algorithm was verified by performing simulations and compared the simulated results with those obtained in an open-loop control system. All simulations were conducted in the PLECS program using a control algorithm written in C programming language.