To achieve net zero, more and more distributed renewable energy sources have been connected to distribution networks. In the meantime, some distributed and dynamic loads including fast chargers of the electrical vehicles are being integrated with distribution networks as well. The higher penetration of these distributed sources and loads leads to much more significant grid voltage variations which may lead to the violation of the power quality standard EN50160\. To address this challenge, this project proposes to use inherently-safer hybrid transformers in distribution networks to regulate the grid voltage and improve the power quality. Compared to conventional transformers, the proposed hybrid transformers, consisting of a conventional transformer and a fractionally rated power electronic device, combines the robustness, high efficiency, and low cost of the low frequency transformer with the comprehensive controllability of the power electronics devices. The fractionally-rated power electronics allows the hybrid transformer to actively regulate the grid voltage and power flow in distribution networks. As a result, it can help significantly boost the uptake of renewable energy resources and electric vehicles.