Submitted in fulfilment of the requirements for the degree of

ii In the twenty-first century the most critical and important issues with regards to the global climate change problem are Smart Grid and Renewable Energy technologies. The evolution of current centralised generation in the form of distributed generation and Smart Grids provides a great opportunity to eradicate several issues associated with energy efficiency, energy security, power quality and the drawback of aging power system infrastructures. In order to meet the rising electrical power demand and increase service quality as well as reduce pollution, the existing power grid infrastructure should be developed into a Smart Grid that has the flexibility to allow interconnection with the distributed generation. However, integrating distributed generation to power systems causes several technical issues, especially system stability. Therefore, to fully address the issue, current existing power systems should be up-graded to Smart Grid. To make the power grid become 'smarter', particularly in terms of stability and flexibility, Flexible AC Transmission System (FACTS) devices, especially Static VAR Compensators (SVC) are used. With the concept of Smart Grid, there are high possibilities that the interconnection of distributed generation issues can be solved and minimised. This thesis discusses the impacts of distributed generation on Smart Grid technology, in particular it identifies and determines whether the system remains stable or not after installing distributed generation into Smart Grid systems. This was done by examining the primary stability parameters of the system such as power angle, frequency and voltage. The simulation iii result shows that the SVC makes the grid become smarter. This is achieved because SVC has the ability to improve the system stability through voltage enhancement, either by injecting or absorbing reactive power during integration of distributed generation. The result was validated by simulations for specified scenarios in DIG