A distributed generation (DG) system and a micro power grid have great advantages in utilization of clean energy yet also face numerous problems. Detection of an island effect represents the key link in control over the DG system. The island effect refers to a situation when, due to such factors as a fault in the DG system or maintenance and the like, a large power grid is cut off or stops working, grid-connected equipment does not effectively detect a power failure state and disconnect DG equipment from the large power grid but still supplies energy to a local load. A conventional island detection technology can be divided into a passive detection method, an active detection method and a remote detection method. Compared to the prior art, the method provided by the invention has the following advantages: an island event is rapidly, accurately and reliably detected, the defect of a blind area existing by use of the passive method is effectively avoided, at the same time, injection of certain disturbance signals in a power network is unnecessary, the quality of output electric energy of the generation system is improved, and harmonic wave pollution is prevented.