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High demand for sustainable electric energy makes the use of Distributed Generators (DGs) inevitable for future systems. However, introducing DGs into distribution networks increases fault current levels with potential for causing serious damage to power system apparatus. Increasingly, power quality during fault and recovery periods is also adversely affected. To alleviate these problems, a Static Fault Current Limiter (SFCL) is investigated in this work as a potential solution. The studied SFCL comprises a bridge rectifier with semiconductor switch IGBT bypassed by limiting inductor and ZnO Varistor. A case study of a 15-kV radial distribution system with SFCL located at the source end is simulated using EMTP-RV software. Simulation results following system faults show that the use of SFCL in distribution networks can efficiently suppress fault current magnitudes and enhance the power quality in terms of voltage sag.