The growing integration of renewable energy sources, particularly photovoltaic (PV) and wind power, presents challenges such as reduced system inertia and increased susceptibility to inter-area oscillations. These issues, coupled with stricter regulatory demands for grid stability, highlight the urgent need for effective damping solutions. This study proposes a novel method for detecting and mitigating inter-area oscillations using a power oscillation damping (POD) controller enhanced by applying a Fast Fourier Transform (FFT). The controller’s parameters are optimized through the Nobel Bat Algorithm (NBA) and fully implemented in DIgSILENT PowerFactory (DSPF). Simulations conducted on the New England IEEE-39 power system model under varying levels of renewable energy penetration demonstrate the model’s capability to dynamically detect, mitigate, and deactivate oscillations once stability is achieved. This work addresses emerging regulations requiring oscillation damping systems and offers a framework for certifying POD controllers for real-world implementation, ensuring their adaptability to diverse energy systems and regulatory contexts.