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This article proposes an adaptive controller in a deregulated power system for generation related ancillary services. In an interconnected power system, due to the intense participation of Gencos, the frequency and tie-line responses become aggressive in nature, which in turn affects the ancillary services in the power system like AGC. The ANFIS controller is designed here using MATLAB – Simulink for a five area control structure, in order to retain the balance between the generation and demand and also the steady state error of the proposed control area. The test system constructed with Thermal-hydro-Gas power generations and the performance of the controller is evaluated by applying large load disturbances and sudden perturbations with nonlinearities like Generation Rate Constraint (GRC) and Backlash. The simulated results show that the proposed control strategy provides better performance for this large interconnected power system in a deregulated environment.

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