Significantly large integration of distributed generation (DG) is expected due to the encouraging government policies, great concerns on environment and optimising economic benefits. This integration raising a lot of concern on stability, security and reliability of power system network which will create many challenges in operating the network due to different characteristics possessed by DG. These concerns and operating challenges need to be investigated to identify the possible problems that may arise and then followed by finding a countermeasure for mitigation. This dissertation addresses most important issues, challenges and opportunity in with DG penetration. It covers: • Modeling of distributed generation: • DG fault ride-through capability: • Grid support by DG: • Influence of DG on power system stability • Predictive var management inside future distribution network: In conclusion, overviews of DG’s most pertinent aspects are discussed, concerns with large DG penetration are answered and solutions to mitigate expected operation challenges are proposed.