Fluctuating wind conditions necessitate the use of a variable speed wind turbine (VSWT) with a AC/DC/AC converter scheme in order to harvest the maximum power from the wind and to decouple the synchronous generator voltage and frequency from the grid voltage and frequency. In this paper, a combination of a three phase diode bridge rectifier (DBR) and a modified topology of the diode clamped multilevel inverter (DCMLI) has been considered as an AC/DC/AC converter. A control strategy has been proposed for the DCMLI to achieve the objective of grid interface of a wind power system together with local load compensation. A novel fixed frequency current control method is proposed for the DCMLI based on the level shifted multi carrier PWM for achieving the required control objectives with equal and uniform switching frequency operation for better control and thermal management with the modified DCMLI. The condition of the controller gain is derived to ensure the operation of the DCMLI at the fixed frequency of the carrier. The converter current injected into the distribution grid is controlled in accordance with the wind power availability. In addition, load compensation is performed as an added facility in order to free the source currents being fed from the grid of harmonic distortion, unbalance and a low power factor even though the load may be unbalanced, non-linear and of a poor power factor. The results are validated using PSCAD/EMTDC simulation studies.