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The work aims to study the potential for efficient use of distributed generation in the small urban power supply system and its feasibility in modern urban microgrids. The work used statistical data analysis, mathematical simulation using the PSCAD software suite, and simulations of a distributed generation facility based on a batterytype electrical energy storage and photovoltaic plant. The mains network of the facility located in the small residential estate of Tashkent, Republic of Uzbekistan is accepted as the object of the study. The results calculated using an urban grid simulation model showed that the use of various distributed generation sources improves the reliability of power supply and reduces the burden on medium- and high-voltage electrical networks. Moreover, this activity in the shown example improves load balancing in low-voltage networks: power loss in network cells and voltage drop were reduced by 5 and 3%, respectively. Thus, the use of distributed generation in the urban power supply system was scientifically justified using the example of a real microgrid located in Kokand. A detailed mathematical analysis of the technical and economic indicators of the urban electrical supply system was performed to formulate the comprehensive model of the system state. In parallel, a simulation model was developed based on detailed models to reflect the layout of the considered electrical network and dynamics of the distributed generation facility. Further research will include the feasibility study of direct current microgrids for urban power supply, taking into account the active introduction of renewable energy sources.