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This study presents mixed integer non-linear programming (MINLP) approach for determining optimal location and number of distributed generators in hybrid electricity market. For optimal location of distributed generation (DG), first the most appropriate zone has been identified based on real power nodal price and real power loss sensitivity index as an economic and operational criterion. After identifying the suitable zone, mixed integer non-linear programming approach has been applied to locate optimal place and number of distributed generators in the obtained zone. The non-linear optimisation approach consists of minimisation of total fuel cost of conventional and DG sources as well as minimisation of line losses in the network. The pattern of nodal real and reactive power prices, line loss reduction and fuel cost saving has been obtained. The results have also been obtained for pool electricity market model for comparison. The impact of demand variation on the results has also been obtained for both the market models. The proposed MINLP-based optimisation approach has been applied for IEEE 24 bus reliability test system.