Distributed Generators are rapidly penetrating the traditional Power Distribution Networks, offering a number of technical, environmental and economic benefits. Meanwhile, they have some negative impacts on network stability as they noticeably reduce the overall rotational inertia and then the utility will no longer be an Infinite Bus having constant voltage and frequency. Therefore DG's have to improve system stability in order to have an efficient and, in the same time, a robust network. In order to optimally utilize DG's, they need to be dispatchable, which is not always an available
facility. This paper utilizes a multi-function nonlinear inverter-based link for DG systems, Flexible Distribution Generation, to implement several ancillary services and improve system performance depending on their penetration level in the network. The performance of the proposed system is simulated using PSCAD/EMTDC. The results are discussed to demonstrate the potential of the proposed scheme.