In this paper, direct power control system for three-phase PWM AC/DC converter without the source voltage sensors is proposed. The sinusoidal input current and unity effective power factor are realised based on the estimated flux in the observer. Both active and reactive power calculated using estimated flux. The estimation of flux is performed based on the Reduced-order flux observer using the actual currents and the command control voltage. The source voltage sensors are replaced by a flux estimator. The active and reactive powers estimation are performed based on the estimated flux and Phase anble. The proposed algorithm is verified through simulation and experiment.