This paper addresses a new decentralized robust strategy to adapt the well tested classical automatic generation control (AGC) system to the changing environment of power system operation under deregulation based on the bilateral AGC scheme. In each control area, the effect of bilateral contracts is taken into account in a modified traditional dynamical model as a set of new input signals. The AGC problem is formulated as a multi-objective control problem, and the mixed H2=H1 control technique is used to synthesis the desired robust controllers for AGC design in a multi-area power system. A three area power system example with possible contract scenarios and a wide range of load changes is given to illustrate the proposed approach. The results of the proposed control strategy are compared with the pure H1 method. The resulting controllers are shown to minimize the effect of disturbances and maintain robust performance.
