Microgrids have become increasingly popular in recent years due to technological improvements, growing recognition of their benefits, and diminishing costs. By clustering distributed energy resources, microgrids can effectively integrate renewable energy resources in distribution networks and satisfy end-user demands, thus playing a critical role in transforming the existing power grid to a future smart grid. There are many existing research and review works on microgrids. However, the thermal energy modelling in optimal microgrid management is seldom discussed in the current literature. To address this research gap, this paper presents a detailed review on the thermal energy modelling application on the optimal energy management for microgrids. This review firstly presents microgrid characteristics. Afterwards, the existing thermal energy modeling utilized in microgrids will be discussed, including the application of a combined cooling, heating and power (CCHP) and thermal comfort model to form virtual energy storage systems. Current trial programs of thermal energy modelling for microgrid energy management are analyzed and some challenges and future research directions are discussed at the end. This paper serves as a comprehensive review to the most up-to-date thermal energy modelling applications on microgrid energy management.