A method and system for operating neighbouring microgrids is disclosed. The method includes creating a first set of energy management policies associated with a predefined area and a second set of energy management policies associated with a microgrid. The method includes measuring power usage data associated with predefined area and current charge level of batteries within the predefined area. The method further includes determining future power demand of the predefined area, based on predefined analytics performed on the measured power usage data and the current charge level of the batteries. The method includes adapting the data models of predefined area with the data models used in microgrid and utility operations for seamless integration of operations and to optimize overall operations while complying with local, edge and overall policies. The method includes applying the first set of energy management policies within the predefined area based on the determined future power demand.