From the viewpoint of the emerging concept of smart grid, distribution network will require fast power flow solution that must be resolved as efficiently as possible. Presence of distributed generators and power electronic based compensating devices, in modern medium and low voltage distribution networks, additionaly expands requirements for performances of algorithms for power flow calculations which are an essential part of effective smart distribution system analysis tools. The solution which can respond to most of defined requirements is proposed in this paper. This paper presents improved algorithm for power flow calculations for radial and weakly meshed distribution network with distributed generation and compensating devices. Proposed algorithm is based on the classical implicit impedance matrix (Z bus ) Gauss method. Algorithm, presented in this paper, is enforceable to any one-sided supplied distribution network topology and can calculate the impact of distributed generation from renewable energy sources on electrical power losses and voltage magnitudes. Algorithm is applied to IEEE 33 bus test distribution network, modified by adding tie lines to get meshed network. Efficiency of proposed algorithm is confirmed by calculations for different switching scenarios within analysis of system abilities made to meet requirements for integration of distributed generators in defined system nodes. Described analysis were carried out for both systems, with and without compensation devices included.