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As the remote areas can not be connected to large electric system, using local renewable resources and a certain capacity of energy storage devices to construct a microgrid for power supply will be the only choice. This paper introduces a new energy management strategy of islanded microgrid based on power flow control. The islanded microgrid utilizes the hybrid AC/DC structure. Battery storage system keeps the DC bus voltage constant, PV array as a current source is connected to the DC bus and a main DC/AC inverter in VF mode is used to provide the voltage and frequency references for the AC bus. In this energy management strategy, power flow control is applied to regulate the SOC of batteries in the certain range, control the batteries to avoid over-discharge/over-charge and frequent transition between charge and discharge by the means of output power limitation of the solar energy, switching wind turbine and controllable load and so on. The PSCAD test results show the feasibility and effectiveness of this energy management strategy.