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The paper presents a new method for loss allocation in radial distribution networks (DN) with dispersed generation (DG). The method is based on the power summation algorithm, the branch-oriented approach in particular, and establishes direct relationship between losses in each branch of the network and injected active and reactive power in the nodes. Active and reactive power at receiving node of each branch of the network is decomposed as a sum of all node injected powers, including branch losses in the branches fed by the particular branch. Allocation of crossed terms of active and reactive power is calculated using quadratic relation between power flows and losses. DG active and reactive power injections in the summation process are treated as negative loads, while active and reactive loads are considered positive. Results of the application of the method on 32-node test system are presented, discussed, and compared with other published methods.