Abstract
An algorithm for construction of an observer is presented. The inputs to this observer are the operating data of the generator obtained during system transients and its outputs are the estimates of unmeasurable damper winding currents for a given instant of time. The observer parameters are functions of the machine steady state conditions and are time-varying. Computer simulation results show that accurate estimates of the damper winding currents can be obtained by this observer, A parameter estimation algorithm which uses the outputs of this observer to recursively estimate the parameters of the machine is also presented. This algorithm estimates the parameters' trajectories as the machine moves from one operating condition to another. The possibility of using the trajectories obtained for the machine parameters in detecting incipient faults is also discussed.

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