In this article a type-2 fuzzy PID-FOPI controller is proposed. Opposition based Sea-horse Optimization Algorithm (SHO) is used in it and used to obtain ideal setting of proposed controller. The proposed controller is being compared to basic controllers. The hybrid system under study includes distributed generation (DG), biogas plants, and thermal systems. Nonlinearities like Boiler Dynamics (BD), Governor Dead Band (GDB), and Generation Rate Constraint (GRC) are examined in the proposed system in order to get the realistic approach. The effect of with and without Renewable energy sources (RES) are study after penetrated into the LFC multi area power system. The study illustrates that system response improves in presence renewables sources deregulation. The virtual inertia is applied in the proposed system. The integration of FACT devices in proposed system which enhance the system complexity and robustness of proposed system.