When an inverter is tested with a motor emulator, most of the power circulates in a loop consisting of inverter, emulator, and DC-DC converter. Only the device losses are compensated from the grid, so they usually do not exceed 20% of the circulating power. Most commonly, an isolated bi-directional DC-DC converter is used between the back ends of motor emulator and inverter. In this work, the bi-directional DC-DC converter is replaced by a three phase high frequency system between two PWM (AC-DC) converters. Furthermore, two frequency current components are used independently based on two different reference frames: the 60 Hz is utilized for power trading with the grid, whereas 2 kHz is employed for power circulation. The high frequency link is especially beneficial, since it reduces the size of isolation transformer drastically. The effectiveness of the control algorithm is supported by computer simulation and experimental results.