The need to reduce greenhouse effect using distributed energy resources has significantly increased in recent years, particularly with the advent of deregulated market. Climate changes cause large swings in output power of renewable resources and the resulting fluctuations in frequency in the islanded microgrid (MG). To increase performance for a wide range of power system operating conditions, an energy management system is proposed based on a fuzzy fractional order proportional-integral-derivative (PID) (FFOPID) controller. It is able to analyze and simulate the dynamic behavior in grid-connected MGs. This controller is proposed in the MG encompassing distributed generation resources with plug and play ability. The performance of FFOPID controller is verified for frequency control purposes and to support internal bus voltage in both islanded and grid-connected operating modes in accordance with the failure time. Energy storage is used to improve the system dynamic response, reduce the distortion, and provide damping for frequency oscillations caused by renewable resources. Energy storage overload capacity is utilized for rapid initial control of frequency in MG. To achieve this goal, energy management system based on fuzzy decision mechanism combined with a PID controller and FFOPID is implemented according to the characteristics and limitations of overloading and state of charge. The obtained results show good performance of FFOPID controllers by improving the transient stability following a fault that has caused the islanded operation. Simulation results have validated the effectiveness of FFOPID controllers in the system under several scenarios with superior stabilization and more robustness in comparison with the fuzzy logic PID (FLPID) controller and PID controller. Copyright (c) 2016 John Wiley & Sons, Ltd.