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This paper focuses on robust model-based fault detection and fault-tolerant control of distributed energy generation systems subject to time-varying external disturbances and control actuator faults. An observer-based output feedback controller that enforces robust stability with an arbitrary degree of disturbance attenuation in the absence of faults is initially designed for each subsystem. Fault detection is performed locally by comparing the output of the observer with that of the system, and using the discrepancy as a residual. An explicit characterization of the fault-free behavior of the closed-loop system is obtained in terms of a time-varying bound that captures the effects of discrete measurement sampling, plant-model mismatch, and external disturbances. This characterization is used to derive a time-varying alarm threshold on the residual for robust fault detection, and a controller reconfiguration law that determines the feasible fall-back control configurations that preserve robust stability and minimize performance deterioration. Contingency measures in the event that local fault recovery is not possible are discussed. Finally, the design and implementation of the integrated monitoring and fault-tolerant control architecture are demonstrated using a simulated model of a solid oxide fuel cell plant.