The islanded microgrid is an effective approach for improving the utilization rate of renewable resources

and the dynamic economic dispatch is a vital part of microgrid operation. This paper provides a model of dynamic economic dispatch for islanded microgrids

and proposes a consensus-based distributed method of implementation. The system optimization is realized through the local computation and a little neighborhood information exchange among the units. The approach is comprised of two stages. In the first stage

each unit obtains systemic information by the average consensus algorithm

then the power demand scheduling for the controllable loads can be pre-arranged to maximize the utilization of renewable energy. In the second stage

the dynamic optimization problem is decomposed into a series of single-period economic dispatch problem by updating the upper and lower output boundaries of generators or energy storage systems in each time period. Then a pinning consensus algorithm is used by each unit to calculate the optimal output of each time period based on the equal incremental rate criteria. Simulation results are presented to demonstrate the validity of the proposed model and approach.