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S-transform and wavelet transform based approach for islanding detection is proposed in distributed generation (DG) based hybrid system. The hybrid system consisting of photovoltaic, fuel cell and wind systems connected to utility grid are considered. The negative sequence voltage signal is used in islanding detection of these resources from the grid. The energy content and standard deviation (SD) of S-transform contour and wavelet transform signal is also reported for the study which clearly reflects the advantages of S-transform in localizing and detecting the islanding events.