The present invention discloses a method for determination of site selection of a unified power flow controller (UPFC) of a power grid. The method comprises the steps of: constructing power flow dataand a stable data model of an alternating current power grid according to the structure of the alternating current power grid; determining loops exceeding stable heat limit itself after faults are generated, and combining a UPFC into the loops exceeding the stable heat limit itself after faults are generated; increasing the number of starting-up of generators at a transmitting terminal area, and reducing the number of starting-up of generators at a receiving terminal area so as to ensure the same of the improving values of the transmission power of transmission sections; determining fault setsof the loops in each transmission section exceeding the stable heat limit when the UPFC does not work; respectively calculating the UPFC capacity required by regulation of the transmission section power flow in each fault scene in the fault set corresponding to each transmission section, and determining an optimal arrangement point; and performing stable heat correction and checking of the receiving terminal area of the transmission section where the optimal arrangement point is located, and determining the site selection of the UPFC of the power grid according to determination of whether there is a reactive demand in the receiving terminal area of the transmission section where the optimal arrangement point is located.