Based on the community structure theory of complex network, a new coherency-based dynamic equivalence algorithm is proposed. Firstly, a weighted Laplace matrix is constructed for the dynamic power grid. Based on this matrix, the system is divided into two zones by using the spectral bisection method. The zone containing generators with the least synchronizing weaken index is chosen as the study zone, and the other is taken as the external zone. Then the external zone is separated into several equivalent areas using aggregation method and modularity index. The simulation results on IEEE-39 bus system show that, the proposed algorithm can distinguish the study zone from the external zone automatically, and determine the area number and division scheme in external zone with little computation cost, and the method is fast and precise.