Over the past few decades, electricity supply systems have greatly expanded and become far more sophisticatedly interconnected than ever, mainly due to the continuous increase of power demand. Consequently, the fault current levels have increased significantly and become a major concern for electric power systems and may bring adverse effects to system security and reliability. Meanwhile, the rapid and dramatic progress in Distributed Generations (DGs), particularly renewable energy based ones, have further increased the complexity of the power network and led to even larger pressures on system fault current capacity. DGs are generally small generator units installed close to the power consumers and involve the application of new energy conversion technologies, e.g. inverter-based grid connections. DGs under regular load conditions generally have the benefit of reducing power losses in the distribution system, since they are locally substituting energy delivery through the distribution network with local delivery. However, despite this favourable effect DGs also contribute fault currents in case of network faults, potentially adversely affecting the network protection system. For instance, in a radial distribution network the inverse time overcurrent relays are usually used for fault protection. As the introduction of DG into an existing distribution network inevitably increases the level of fault current with its fault current contribution and at the same time may change the direction of current flow, DG can ultimately disturb the original overcurrent relay coordination. Additionally, voltage aspect power quality is another task for power networks with DGs during faults. The increasing fault currents lead to voltage sags at the feeder neighbouring the faulty ones, potentially causing power instability. Besides, for DGs connected to the utility, since their output voltage and frequency are determined by the system AC source, they become very sensitive to external disturbances which can cause unnecessary disconnections in certain circumstances. Losing connection of a large number of DGs may lead to the sudden appearance of hidden loads, previously locally supplied by the DG and impact the voltage profile. These problems associated with DG presence could be solved by numerous technologies, among which the use of Fault Current Limiters (FCLs) is able to solve both problems at the same time. FCLs are widely investigated as a device to reduce fault current levels in electric power networks nowadays. Currently there are three major types of FCL: Superconducting FCL (SFCL), Electromagnetic FCL (EMFCL) and Solid-state FCL (SSFCL). Compared with other types of FCL, the SFCL has the advantage of being self-triggering, fast responding and self-recovering. The thesis aims at developing a new topology of Flux-lock SFCL with better performance compared with the existing topology. The most significant feature of the new topology is adjustable current limitation and shortened recovery time. Simulation results displayed in this thesis indicate that the improved topology of SFCL with optimized impedance parameters can significantly limit short-circuit currents and greatly reduce the negative effects of DGs on protection coordination schedules. In addition, it is also suggested that SFCL can improve voltage sags as well as DG power variation margins required to keep DG interconnected with the distribution network during fault conditions. Another part of this thesis is the optimal allocation of multi-SFCLs in a more complicated power system rather than radial networks. A new linearization-based method is proposed and proven to be able to converge into a favourable solution very quickly. It is practicable to apply this method to real and complex power systems currently in operation.