Renewable energy (RE) sources when integrated to utility network to form hybrid power system pose challenges in terms of stability and power quality. A method based on Stockwell's transform (S-transform) is presented in this paper for power quality (PQ) assessment and detection of islanding, outage and grid synchronization of renewable energy sources. Voltage signals are decomposed using multi-resolution analysis (MRA) of S-transform and features extracted are realized to assess the power quality disturbances associated with various events. Operational events are detected with the help of features extracted from the S-transform based decomposition of negative sequence component of voltage. A power quality index is proposed to rank the various operational events based on power quality. Proposed algorithm has been tested successfully on IEEE-13 bus test system with necessary modifications to integrate wind and solar PV generators to form the hybrid power system. Simulation results are validated in real time environment with the help of real time digital simulation (RTDS) system. © 2018 Elsevier B.V.