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Increased fault level is one of the main concerns connected to the integration of distributed generation (DG) into distribution networks. To accurately calculate fault currents in distribution systems with a high penetration of DG, a realistic fault model must be developed that includes the electrical arc existing at the fault point. The results of an assessment of the impact of DG on such arcing faults are presented. The significance of the study is that the fault model includes the electrical arc element, which brings additional non-linear resistance into consideration. Since the arc resistance is a non-linear function of the fault current, the problem of simultaneous fault currents and arc resistance calculation has been tackled using a novel iterative algorithm. In this work, a typical medium voltage distribution network is considered. Results of the simultaneous fault analysis and arc resistance calculation in the IEEE-34 distribution network with a distributed generator are presented and discussed.