This study highlights the operation under the bilateral scenario of the deregulated environment, considering a three unequal area thermal system, wherein several renewable sources namely geothermal plant (GTP), solar thermal and wind had been integrated to analyse their effect both through dynamic responses as well as analytically from the aspect of GENCO participation, related to the price based environment. Later a flexible alternating current transmission (FACT) device, interline power flow controller (IPFC) is being connected to the above-considered system at different positions. Various observations are made for checking if there is an optimal location for the placement of IPFC and it reflects that IPFC placed between the tie lines of area 1 and area 3 shall economically be the most feasible option. The considered thermal systems are provided with suitable generation rate constraints. In this study, an initiative has been taken to use a new combination of fractional order (FO) cascade controller, FO integral-FO proportional-derivative as secondary controller and its capability is being checked with the traditional controllers revealing it to outperform the others. The gains and other required parameters of all the secondary controllers are optimised by means of the stochastic sine cosine algorithm. © The Institution of Engineering and Technology 2019