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The development of technology and increase in the demand of electricity becomes a great challenge for the power distribution utilities to provide an uninterruptable supply to the consumers. Thus Distribution Automation is required for fault identification, isolation and restoration of loads in an efficient manner. The objective of this paper is to discuss the restoration of power system with distributed energy using Multi agent system(MAS). In this paper, a proposed 9-bus system with distributed generation has been taken and agents are created using Java Agent Development Environment(JADE).The smart grid system has designed and simulated using MATLAB Simulink for fault identification and restoration of the system.