Automatic Generation Control (AGC) is a system used in power plants to maintain the balance between electricity supply and demand. It automatically adjusts the output of generators to ensure that the frequency of the electrical grid remains stable. This is crucial for preventing blackouts and ensuring a reliable power supply. AGC operates by monitoring the grid's frequency and the load on the system. When there is a deviation, such as an increase in demand, AGC signals generators to increase their output. Conversely, if there is excess generation, it instructs them to reduce output, helping to maintain equilibrium in the electricity grid.