Development and deployment of low-carbon energy technologies has been national strategy of both UK and China for a number of years, which includes the use of renewable generation technologies and the improvement of energy efficiency of operations and activities. The paper presents a community-based microgrid comprising of representative distributed generation technologies such as wind turbines, photovoltaics, and combined heat and power. The system has been simulated by PSCAD/EMTDC under different operational scenarios. Studies include the effect of wind speed fluctuation, control systems and power electronics on wind turbines, PV system, and mixture of wind/solar energy generation under either wind dominant or solar dominant generation. The impact due to changes in electrical events and environmental conditions on power outputs is also assessed. By arbitrary setting of load condition and fault situation, the performance and dynamics of the system are examined. Possible fault locations are simulated to seek an optimal isolation and restoration of the distributed generation units from the connected grid system. Modeling these system interactions has demonstrated the feasibility of the proposed residential microgrid system