Summary
This paper presents a methodology to rank phasor measurement unit (PMU) locations based on small‐signal stability. In the proposed scheme, integer linear programming is utilized to identify the optimal locations of PMUs. These locations are ranked using analytical hierarchy process. Modal analysis is conducted to identify inter‐area modes leading to instability. A control scheme is proposed, to nullify this instability. Based on the control scheme, few critical buses are determined, which are given the highest priorities while ranking. Because a critical bus can be a generator, or tie line or load bus, therefore, three different ranking criteria are utilized. Based on ranking, PMUs are placed in multiple stages such that in the initial stage itself, all critical buses are observed. To check the effectiveness of the proposed scheme, fuzzy and proportional‐integral‐derivative controllers are employed. Proposed methodology is successfully tested on 16‐machine, 68‐bus system. Copyright © 2014 John Wiley & Sons, Ltd.