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The environmental and economical benefits of the microgrid and consequently its acceptability and degree of proliferation in the utility power industry, are primarily determined by the envisioned controller capabilities and the operational features. Depending on the type and depth of penetration of distributed energy resource (DER) units, load characteristics and power quality constraints, and market participation strategies, the required control and operational strategies of a microgrid can be significantly, and even conceptually, different than those of the conventional power systems.