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The harmonics of the electrical networks have negative effects like increasing active power losses, resonance over voltages, increasing the potential of the transformers’ neutral point, over currents in three-phase networks which can lead to difficulties regarding the protection relay selectivity, and capacitor banks overstressing. Harmonics are making their presence felt in electrical distribution networks due to both the use of nonlinear devices in the consumers’ area and the high development of distributed generation. In conclusion, the chapter proves that the network harmonic impedance is a useful tool to estimate the harmonics amplification caused by power factor correction using shunt capacitor banks. The results obtained by calculus are then compared with the values obtained by simulation after the connection of the capacitor bank to the network. Using the values of the harmonic impedance and the capacitive reactance of the capacitor bank that is connected for power factor correction, the amplification of the harmonic voltages and currents is estimated by calculus. A distribution network containing harmonics is modeled using MatLab Simulink, and harmonic impedance is determined by simulation in different operating conditions. Amplification factors are calculated depending on the equivalent harmonic impedance of the network seen in the compensation bus. Based on its values, a quick method is developed to anticipate the harmonic voltages and current amplifications that can occur when a shunt capacitor is installed for power factor correction. This chapter proposes a method for practical determination of harmonic impedance. Power factor correction by shunt capacitor switching in electrical networks containing harmonics can lead to harmonics amplifications by harmonic voltage increasing and capacitors thermal overstressing by great values of the currents flowing through them. Harmonic impedance monitoring and using it in expert systems for operating condition optimization will increase in the future. The unfavorable operating conditions are anticipated based on the network harmonic impedance values, and the means of intervention are selected. This chapter proves that the harmonic impedance is an efficient tool for assessing the state of distribution networks containing harmonics. In this way fault have applied at different location in IEEE 9 bus system and the real time response have fetched with the help of OP 4510 simulator.The importance of the subject is given by the fact that harmonics are making their presence felt in electrical distribution networks, and the cheapest and most widespread solution for power factor correction is the capacitor banks. So change in rotor angle of machines in the system is used as indicator of the transient stability of the system and to calculate the measures taken to maintain frequency and system stability. Rotor load angle is a reliable indicator to identify the uncertainty in the system. In this, the fault is created on different locations in the multi machine system in running condition and transient stability is analyzed for different load and generating conditions in real time. This paper covers the real time simulation/ modelling of the IEEE 9 bus system using RT lab tools. During designing and planning of the project, power system studies plays important role. Power system stability is an important aspect of secure and economic power system operation. Communications in Computer and Information Science