Abstract: In order to meet the requirement of accurate and real-time harmonic current detection needed in dynamic harmonic compensation of power grid of coal mine, the paper proposed a power harmonic detection algorithm named DFT based sliding-window iterative algorithm based on coordinate transformation. The algorithm can detect harmonic reference instruction current real-timely and accurately, so as to improve performance of real-time, anti-interference and synchronization of harmonic detection, and the algorithm has characteristics of little calculation, flexibility application and easy engineering realization. The results of theoretical analysis, simulation and DSP realization showed that the algorithm can extract harmonic instruction current accurately, reliably and real-timely and has a good effect.