Abstract: Part of hoist system in coal mine adopt AC-DC-AC frequency conversion motor speed control devices, which easily brings about harmonic wave and pollutes the coal mine grid. In order to solve this problem in the coal mine, Three-level distribution static synchronous compensator (DSTATCOM) can obtain a higher utilization of DC bus voltage, when the traditional space vector modulation (SVM) used as pulse width output unit. However, the neutral point potential of three-level DSTATCOM based on SVM will appear low frequency oscillation under the situation of high modulation and low power factor, which seriously affect the safety of the device and output voltage waveform quality, reduce the system performance. In this paper, the low frequency oscillation of the neutral point potential appearing in the three-level DSTATCOM is studied, and then a control strategy based on virtual space vector of the three-level DSTATCOM is proposed to eliminate low frequency oscillation of the neutral point potential and guarantee the effect of the compensation. The feasibility and correctness of the proposed method are verified by the experiments.