The paper presents simulation studies of installing distributed generation (DG) at a number of grid stations in the main transmission system of Oman. The diesel-engine driven generator units are required on a temporary basis to aid in meeting the peak demand. A digital model is developed to simulate the system including power plants, transmission system, loads and the proposed DG. The simulation studies are performed by using the DIgSILENT software package. The objective of the studies is to demonstrate effects of the DG in improving system performance in terms of voltage profile, line and transformer loadings, and transmission losses. The results include comparison of the contribution of individual generation at each site and the case with all proposed distributed generators installed.