When REs are integrated into the grid, the ESS is critical to the EMS operational process. The battery storage has a significant impact on total operational costs, as the charge and discharge rates can reduce cycle life. This chapter aims to develop a cost function for optimal energy management of the community MG that includes operational and degradation cost of the battery as well as the effect of the battery capacity on the technical indicators, such as load cover ratio and self-consumption ratio. Further, the study assesses the performance of the hybrid system which relies on economic and environmental GHG emission reduction.