In this paper, a systematic method of choosing the gain parameter of the wind turbine generator pitch control is presented, using the Lyapunov technique, that guarantees stability. A comprehensive digital computer model of a hybrid wind-Diesel power generation system, including the Diesel and wind power dynamics with a superconducting magnetic energy storage (SMES) unit, for stability evaluation is developed. The effect of introducing the SMES unit for improvement of stability and system dynamic response is studied. Analysis of the stability has been further explored using an eigenvalue sensitivity technique. The eigenvalues of the system with and without the SMES unit have been studied, and the effects of variation of the SMES unit parameters or eigenvalue locations are plotted. The dynamic response of the power system to random load changes with optimal gain setting is also presented. (C) 1997 Elsevier Science Ltd.