Aiming at the prominent network security problems of electric power system, especially the islanded microgrid, based on key agreement protocol between two parties of public key cryptosystem, a key agreement protocol is designed for islanded microgrid. Considering the requirement of wide and deep monitoring terminals coverage, the NB-IOT is used to communicate. Then the security of the key agreement protocol is analyzed. Besides, the key code is implemented and simulated. Lastly, a large number of experimental data analysis show that the three stages of key agreement only need 40 milliseconds, 23 milliseconds and 4 milliseconds, respectively. Therefore, the protocol can efficiently and quickly realize the identity authentication and key negotiation between two parties to prevent data tampering, replay, forgery attack and so on. This work is supported by Science and Technology Project of Jiangxi Province Education Department (No. GJJ180323).