The demand for electrical power in the modern world is constantly increasing. This increase in demand, however, is faced with challenges that call for a different approach toward electrical power generation, transmission, and consumption. Some of the main challenges are: the environmental cost of current electric generation, eventual depletion of non-renewable sources of energy, and the need to upgrade existing Electrical Grid Infrastructure towards Smart Grids. Microgrid concept refers to the idea of combining multiple local electrical power sources and storage elements in an area within a single entity. Unlike the main grid, power within a Microgrid is produced locally; mainly using Distrubuted Generation (DG) units that include Renewable Energy Resources (RES). Additionally, a Microgrid includes Distributed Storage (DS) units and variable loads. This concept promises to resolve many of the issues and challenges faced by the increase in the demand of electrical power. In this thesis, an overview of Microgrid concept and its component is given. A model of a Microgrid that is suitable to be implemented in an electrical substation in Oman is described and simulated. The model implements multiple layers of hierarchical control; including primary control of Grid-Feeding converters for DG units, and power management algorithm in a secondary control using Multi-Agent Systems. The Microgrid model consists of 2 DG units (representing a Photovoltaic system and a Wind Turbine), a DS unit, and variable RL load.