A distributed generation system that can suppress a voltage fluctuation caused by a distributed generation by an apparatus of a small power capacity in the distributed generation itself and stabilize the power system voltage without inserting interharmonic voltage or current into the power system and without interference among a plurality of distributed generations. Parameter .alpha.(t) varying with time is estimated based on fluctuating component .DELTA.P of the active power P generated by the distributed generation and the voltage fluctuating component .DELTA.V attributable to the distributed generation developed at the point of connection between the distributed generation and power system. The distributed generation produces reactive power Q=-.alpha.P or Q=-.alpha..DELTA.P, to thereby suppresses only the voltage fluctuation of the power system attributable to the distributed generation.