This thesis investigates using processor-in-loop techniques with non-real-time electro-magnetic transient simulation software for designing microcontroller-based systems. The behaviour of a microcontroller is included in the simulation by directly integrating the target microcontroller into an EMTP co-simulation. Additionally, to assist the design process, the optimization functionality of the EMTP program is extended to the microcontroller algorithm. Since non-realtime simulation does not require specialized test hardware to accurately simulate systems, it is both cheaper and able to be used earlier in the controller design process then hardware-in-loop real-time simulation. A component is created in the PSCAD / EMTDC program to integrate a generic controller running an arbitrary periodic algorithm into an EMTP simulation. The component operation is verified by creating a co-simulation of a three-phase induction motor V / f. speed control. The co-simulation results match the behaviour of the resulting system under a fairly broad range of operating conditions, highlighting the applicability of the technique.