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Electricity market restructuring and supra-national agreements on the reduction of global greenhouse gas emissions have paved the way for an increase in the use of distributed generation - the connection of generation to the lower voltage power system. This paper formulates and discusses a methodology for the optimal siting and sizing of distributed generation a security constrained system can accept. Optimal siting is determined by sensitivity analysis of the power flow equations. The sizing method for a set of loading conditions, generation penetration level and power factor is formulated as a security constrained optimization problem. The information on optimal generation sites is used further to optimize system reliability assessed via reliability indices calculation. A genetic algorithm is designed to solve for optimal recloser positions when distributed generators are deployed in a securely optimal manner.