Abstract: The access of distributed generation is beneficial to reduce the distribution system network loss. An optimization model of planning schemes is proposed to determine the location and capacity of distributed generation in the distributed network. Firstly, the contribution of each bus’ injected power to the system network loss is calculated through network loss sensitivity analysis, by which the optimal location of distributed generation is determined. On this basis, a planning model to minimize network loss is established. The benefit coefficient is presented to ensure that the optimized scheme is efficient to reduce network loss. Final, the proposed method is applied to IEEE 33bus test distribution system, and the simulation result verifies the effectiveness of the proposed method.