Abstract: Due to the low-inertia and significant renewable generation variability in isolated microgrids, short time-scale fluctuations in the order of seconds can have a large impact on a microgrid's frequency regulation performance. In this context, the present paper presents a mathematical model for an Energy Management System (EMS) that takes into account the operational impact of the short-term fluctuations stemming from renewable generation rapid changes, and the role that renewable curtailment and batteries, including their degradation, can play to counter-balance these variations. Computational experiments on the real Kasabonika Lake First Nation microgrid and CIGRE benchmark test system show the operational benefits of the proposed EMS, highlighting the need to properly model short-term fluctuations and battery degradation in EMS for isolated microgrids with significant renewable integration.