In this paper, we investigated the necessity and effects of optimal control methods in the stability and performance of a micro-grid that operates in islanded mode. The micro-gird is consisted of a combine heat and power (CHP), a capacitor bank (CB), photovoltaic panel (PV) as power generation sources. In addition, battery and the building electricity and thermal load are placed on the load side. A simple comprehensive model is assumed for each component of the micro-gird and the dynamic behavior of micro-grid voltage and frequency is studied in details. Since the micro-grid operates in islanded mode, the fluctuations in the building load act as disturbances and could cause the instability in the voltage and frequency. So it is necessary to design a controller to regulate the voltage and frequency. Particle swarm optimization (PSO) is used as a method to realize the optimal controller in the micro-grid. Simulation results showed the effects of proposed controller on the reduction of voltage and frequency fluctuations.
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