Active/reactive power management in islanded microgrids via multi-agent systems

•The proposed strategy aims to balance active and reactive powers to ensure proper steady state operation of islanded MGs.•A two-stage hierarchical approach using intelligent agents distributed in three levels is implemented to ensure efficient and fast responses.•The strategy relies on forecasted short-term data to calculate the optimal operating conditions of the MG for the next period.•In real time operation, expert-system rules are applied to attempt eliminating the mismatch in the forecasted data.•A guideline for the selection of the communication system is provided to avoid tripping the protective devices due to frequency or voltage deviations.