The generation, transmission and distribution of the electricity is the business of the utility companies, being performed through complex networks of interconnected generators, transformers, transmission lines, control and protection devices and equipment, monitoring and measurement equipment, which was developed over a century. Most of the modern power systems are three-phase, from power generation, transmission to the power distribution and use because is the most efficient and economical way to perform its functionalities. Only near to the costumers is the power changed from three-phase to single-phase power. In power systems the generator voltages are stepped-up at much higher levels for efficient long distance transmissions, and only near the consumer locations is lowered form the transmission levels to the required consumer levels. An electrical grid is an interconnected network for delivering electricity to consumers. The electrical grid has evolved from insular systems, servicing a particular geographic area to a wider, expansive network that incorporated several areas. Distributed generation (DG) is developing into a significant market in the generation, distribution and utilization of electrical energy. It includes local fossil-fuel derived energy sources, such as cogeneration or combined heat and power generation, renewable energy sources, such as wind and hydro, and low-carbon hybrid energy systems that combine energy sources, whether renewable or fossil fueled. Depending on the generation scale and size, the renewable energy and distributed generation systems are integrated into the utility grid either at the transmission level or usually at the power distribution levels. However, over last decade, the flexible, stronger and smarter grids are begging to play a more crucial role in the integration of variable renewable energy systems (RES). As high levels of the variable RES and DG integration become increasingly common across the power systems, attention to grid operations, protection and planning are becoming more and more important. Smart grids offer new ways for integrating variable RES, however, the technology is not the only important area of focus, but also policy, regulation, and business models are needed to incentivize and implement next-generation grid architectures and extended RES and DG integration. The chapter includes a brief description of the power system structure, power system components and functions, background topics of RES grid integration, challenges and the modern integration approaches. Fundamental aspects and issues of the renewable energy systems in the electricity generation mix, integration alternatives, methods and subsystems used for protection, control and power electronics of grid integrated renewable energy systems are also presented. A discussion regarding RES and DG effects and impacts on the power system operation, stability and power quality is also included. For interested readers a list of important references on the topics is included at the chapter end.