This chapter addresses the issues relating to the reliability assessment of distribution systems in which local generation is embedded. Superficially it could be expected that conventional approaches used for existing sys tems would suffice. However, this would be an erroneous conclusion for reasons discussed later in this chapter, although the required techniques can be based on developments of existing approaches. To appreciate all the issues involved it is therefore desirable to review existing approaches and their limitations regarding embedded generation before developing approaches and techniques to deal with these systems.