An advanced combined co-phase traction power supply system is proposed by combining a single-phase traction transformer and an active power flow controller (PFC) in an electrified railway. In the new system, the power quality problems caused by single-phase traction load are solved in the grid side and continuous power can be provided to electric trains without neutral sections in the traction side. The mathematic model of the new system is built by power transformation analysis. The compensation currents of the PFC are calculated based on the power balance principle. According to the power quality standard in China, the optimised partial compensation algorithm is presented to replace the existing full compensation one. Moreover, the capacity of the PFC adopting the proposed algorithm is much less than those in the previous studies with the same outcome. The validity of the compensation algorithm and the control method are demonstrated by the simulation results and the effectiveness of the proposed system is verified by the case studies.