In order to solve the problems caused by the increase of capacitor current in distribution network, the decentralized compensation grounding method of arc suppression coil is put forward, and the running characteristics of arc suppression coil distributed compensation grounding system are analyzed and studied. Firstly, the principle and characteristics of decentralized compensation grounding system are expounded, and the principle and installation method of decentralized compensated arc suppression coil are analyzed. Then, the influence of decentralized compensation arc suppression coil installation position and different capacity distribution on ground residual flow under different transition resistance is discussed.Fanally, the overvoltage of the distributed compensation grounding system is analyzed.Through Matlab / Simulink simulation,the result shows that the decentralized compensation of the arc suppression coil and the traditional centralized compensation can effectively compensate the fault ground current and meet the residual flow requirements,and the decentralized compensation of the arc suppression coil can also suppress the arc overvoltage well.#$NLKeywords: arc suppression coil; decentralized compensation; ground residual flow; arc overvoltage