Microgrids (MGs) with large penetration of photovoltaic (PV) based distributed generation (DG) sources require improved power flow control methods due to the intermittent nature of renewable energy production. In this paper, a flexible power distribution system is proposed which introduces a medium voltage (MV) dc link connection between two smart transformers (ST) with a common battery energy storage system (BESS) configuration. The MVDC connection is achieved without extra investment in converters and this facilitates a flexible way of transferring active power between MGs. The dc power transfer offers a solution with lower power loss in comparison with three phase ac system. This also improves the overall reliability of the system by ensuring the power supply to the loads during ST MV converter failure. PSCAD simulation results are discussed to show the merits of the proposed configuration.