Abstract
This paper presents the analysis of Automatic generation control (AGC) of a two-area hydrothermal system under open market scenario by considering a novel hybrid controller which combines the principles of variable structure controller (VSC) and conventional integral controller. A systematic method is suggested for obtaining switching hyper planes. Open transmission access and the evolving of more socialized companies for generation, transmission and distribution affects the formulation of AGC problem. So the traditional AGC two-area system is modified to take into account the effect of bilateral contracts on the dynamics. Investigation reveals that there is a significant improvement in system dynamic performance with a novel hybrid controller over that of an conventional integral controller. Moreover, the hybrid controller is found to be quite insensitive to wide variations of system parameters.