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There is a drastic decrease in availability of conventional energy sources such as coal, natural gas and oil. The need for using non-conventional energy sources has increased due to the fast rate depletion in conventional energy sources and the ill effects of using them. Research work in the area of renewable energy sources has hence been increased throughout the world. The rate at which power demands are increasing, requires the need for interconnections of various power generation methods. For the proper use of conventional and non-conventional distributed generation microgrid is essential. Microgrid combines one or more generation units and helps to use the power generated in efficient manner. Microgrid includes the generating units, battery storage system with power electronic converters. The use of power converter is important, but the presence of converter generates harmonics usually so that the power quality issues have become serious. Many controllers are used to solve power quality problems, where one of them is the Unified Power Quality Controller (UPQC). Problems linked to power quality become serious due to the use of power electronics appliances. Microgrid power quality is maintained by using UPQC compensating devices. To control UPQC, there must be some controller to intimate the voltage sag, swell and flickers. In this paper the fuzzy logic controller is used for UPQC. An energy management system (EMS) is a system used by electrical utility network operators to monitor, regulate and optimize transmission and generation system efficiency. The system model is created using MATLAB by merging all DC-microgrid, EMS and UPQC, to solve power quality issues.