The power generation efficiency and power cost of an independent microgrid that distributes the power from a small diesel engine power generator was investigated using numerical analysis. The fuel consumption of a small diesel engine and the relation between power generation and heat power were obtained in experiments using a prototype. The independent microgrid built using one to six sets of 20 average houses in Sapporo and the distributed engine generators were examined using these test results. However the operation of a diesel engine power generator controls the number of operations according to the magnitude of the power load of the microgrid. When a diesel engine power generator is distributed, since the power generation capacity per set decreases compared with the central system, the load factor of each engine generator rises. As a result, the operation of an engine at partial load with low efficiency can be reduced. When the number of distributions of the engine generator increases as a result of numerical analysis, the cost of the fuel decreases. However, when the rise in facility cost is taken into consideration, the number of engine generators for distribution is in fact 3 or 4.