With the increasing proportion of new energy in the power grid, it is difficult to meet the high-quality frequency modulation requirements of the power system only relying on traditional thermal power units. A capacity allocation method of the wind-photovoltaic-hydropower-thermal multi-source frequency modulation system based on the stackelberg game theory was proposed. This method ensures the safety of power grid frequency regulation while also taking into account the economy. Firstly, the thermal power unit was taken as the leader and the wind-photovoltaic-hydropower units were regarded as the followers. Secondly, by solving the stackelberg game model, the optimal frequency regulation capacity of each unit participating in frequency regulation was obtained. Then, the improved Shapley value method was used to optimize the revenue of the wind-photovoltaic-hydropower units. Finally, the effectiveness of the proposed method was verified. The result indicates that, compared with existing methods, the stackelberg game model can improve the allocation of frequency regulation capacity for each unit participating in frequency regulation, making it more reasonable and increasing the revenue of the frequency regulation.