The present Report focuses on the potential role of Distributed Generation (DG) in Europe. More specifically, this work aims to investigate the developments related to DG technologies and address the technical issues towards the DG integration into the European power systems. The concept of Distributed Generation is characterised for the purpose of the study and the main tehnical challenges are described. Some technical recommendations - at DG unit and at transmission and distribution system level - for further integration of DG are eventually proposed.