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For problems of voltage and current distortion and capacity waste of grid caused by harmonic pollution, power quality testing and analysis were given, and a scheme of using SVG for harmonic elimination and reactive power compensation were proposed combined with the actual situation of Yaoqiao Coal Mine of Shanghai Datun Energy Co., Ltd.. Results of harmonic elimination and reactive power compensation: power factor raised from 0.8～0.85 to 0.98～1; total harmonic distortion of voltage was less than 4.0%, odd harmonic distortion was less than 3.0%, even harmonic voltage distortion was less than 1.5%; harmonic current was greatly reduced and power quality was greatly improved.