The Alaska Center for Energy and Power (ACEP) is an applied energy research program based at the University of Alaska Fairbanks in Fairbanks, Alaska. ACEP provides leadership in developing energy systems for islanded, non-integrated electric grids and their associated oil-based heating systems. It has established the Power Systems Integration Lab for testing hardware and software components within an integrated grid system. Designed for maximum flexibility, this system is capable of testing a wide range of islanded microgrid and distributed generation scenarios, as well as the performance of individual components. Examples include next generation utility energy storage such as innovative battery systems and flywheel technology, diesel-off operation, power electronics development and testing, and model verification.