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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)
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