Modern distribution grids may suffer problems of voltage distortion, especially along radial low-voltage feeders with a high penetration of intermittent, unbalanced and distorted loads and generation sources. It is a challenge to develop an effective voltage-regulation method using a straightforward implementation. This paper proposes a novel method for local voltage control and balancing using a shunt-connected energy storage system. The compensation principles are explained, and a complete controller design is proposed. The algorithm is designed to be implemented in power electronic converters that provide the interface between the storage and the grid. The original contribution is the development of a low-level control method, which includes voltage balancing and a method to minimize the compensator current and is to be implemented in power electronic converters that provide the interface between the storage and the grid. The calculation of active and reactive compensator currents is explained with relation to the estimated grid impedance. The efficacy of the designed controller is verified by laboratory experiments. It is shown that voltage regulation using the proposed method is achieved with less apparent power compared to a system where only reactive power is used. The controller presents a very good dynamic response to rapid voltage variations, such as unbalanced voltage dips. The applicability and constraints of the method are discussed with respect to the present state of the art in low-voltage-grid voltage regulation.