Compact substation, also known as prefabricated substation or package substation, is a type of factory-prefabricated compact power distribution equipment for indoor/outdoor use that integrates high-voltage switchgear, distribution transformers and low-voltage distribution devices according to specific wiring schemes. It combines transformer voltage reduction and low-voltage distribution functions into one unit, housed in a moisture-proof, rust-resistant, dust-proof, rodent-proof, fire-resistant, theft-proof, heat-insulated, fully enclosed and movable steel structure. Particularly suitable for urban grid construction and renovation, it represents a new type of substation emerging after traditional civil substations. Compact substations are applicable to mines, industrial plants, oil/gas fields and wind farms, replacing conventional civil power distribution rooms/stations to become new complete power transformation and distribution devices.

Compact substations are suitable for residential communities, urban public transformers, bustling downtown areas, and construction power supplies. Users may select compact substations based on specific operating conditions and load classifications. Since their introduction, compact substations have experienced rapid development in China. Driven by accelerated urban modernization and ongoing urban distribution grid upgrades, they are now widely deployed.Regarding compact substations in China, from the late 1970s, European-style compact substations were introduced and imitated from France, Germany, and other countries. Structurally, they adopted a configuration combining high/low-voltage switchgear cabinets with transformers, metaphorically described as "building a house for switchgear and transformers." Since the 1990s, American-style compact substations were introduced, simplifying the structure by immersing load switches, ring network switches, and fuses in transformer oil tanks. Oil-immersed zinc oxide arresters were employed, while conservators were eliminated, leaving tanks and radiators exposed to air. This type is metaphorically called "a box attached to the transformer."