You can replace AVR + PSS by 1 AI controller.

AGC and AVR  could be considered as controller, both could be combined using interrupt control subroutines, in one microprocessor based module or using micro controller, with ADC/DAC.........refer my papers.

Hello  Adelhard , First of all, AGC and AVR are two different control types and are therefore related to two different control problems. You should first understand that both of them can be consider as controllers. AGC  is related to active power control which relates to frequency control or load frequency control (LFC)...AVR on the other hand is related to reactive power and voltage control. Actually, changes in real power affect mainly the system frequency. Reactive power is less sensitive to changes in frequency and is mainly dependent on changes in voltage magnitude. For this reason, real and reactive powers are controlled separately. Frequency control or load frequency control (LFC) loop controls the real power and frequency  while the automatic voltage regulator (AVR) loop regulates the reactive power and voltage magnitude. You can apply several controllers or control strategies to frequency control  and also to voltage control.  Try reading more papers on different kinds of methods used for controlling fequency and voltage. Dr.Desai micro controller method by combining both should be interesting and I suggest you also read it if you can. Finally,  I strongly recommend that you read  the book called " power system analysis  by Hadi Saadat". Read from chapter 12 and above....It has matlab examples and detail solutions etc. Good luck 

AGC and AVR used for keeping stable output analog signal. A constant analog signal is provided irrespective of input signal values.

Controller issues control signal in digital form. Therefore, it can be used to set the output values of AGC or AVR within their specification. 

Therefore, both are required. One cannot substitute other.

Thank you very much for your answers, those should be helpful.