The high requirements to the advanced control systems performance in power engineering particularly in power control of renewable energy sources (RES) lead to application of more complicated and improved control algorithms. The advanced control system design requires consideration of special properties of the industrial processes - time-varying system parameters, nonlinear behaviour and interconnected system. This leads to application of adaptive and robust control algorithms in power control of RES. These algorithms are more complicated than the conventional ones regarding their implementation and verification. In this paper an approach for Hardware In the Loop (HIL) simulation of improved control algorithms is presented. It is based on application of programmable logical controller (PLC) and on plant dynamics simulator. A system for hardware simulation of control algorithms is developed. Its structure and characteristics are shown in particular task - two-regime control system of wind turbine generator speed and power control by aero dynamical torque estimation. It is based on adaptive observer design augmented with an extra integral state. This observer exhibits adaptive features with respect to the external forces applied to the plant. The simulation results show the control system good efficiency combined with a simple implementation.