In microgrid demonstration site, distributed generations can make bidirectional power flows on the system. If an accident occurs, the fault current from the inverter based distributed generation is small. However, the conventional protection scheme in distribution network is designed to operate at high fault current. This means that the traditional protection of distribution network is no longer applicable and new protection methods must be developed. In this paper, for two cases, algorithms for protection coordination of demonstration site is proposed and verified through PSCAD/EMTDC simulation. In first case, protection devices are assumed to have the abilities of directional relaying and communication. In second case, protection devices do not have those abilities. Proposed protection coordination algorithms detect the fault locations and protect the microgrid fairly well.