Isolated Induction Generator means that an induction machine can work as a generator even without an external supply system. A three phase delta connected capacitor bank is connected across the terminals of the machine as shown in the figure below. It provides a necessary excitation to the machine.
The residual flux present in the machine provides the initial excitation. In the absence of the residual flux, the machine is momentarily run as an induction motor to create the residual flux. The motor is running slightly above the synchronous speed at no load by a prime mover. A small EMF is induced in the stator at a frequency proportional to the rotor speed.
The voltage appearing across the three phase capacitor bank gives rise to a leading current drawn by the capacitor bank. This current almost equal to the lagging current supplied back to the generator.
The flux set up by the current helps the initial residual flux causing an increase in the total flux. As a result, the voltage is increased. This increase in voltage causes an increase in the exciting current and a further increase in the terminal voltage.
This increase in voltage continues till the point where the Magnetization characteristic of the machine and the voltage-current characteristic of the capacitor bank intersect each other. The graph below shows the magnetization curve and the V-IC Characteristic.
At this point, the reactive volt-amperes required by the generator are equal to the reactive volt-amperes supplied by the capacitor bank. The operating frequency depends upon the rotor speed, and the change in load affects the speed of the rotor. The voltage is mainly controlled by the capacitive reactance at the operating frequency. The major disadvantage of an Isolated Induction Generator is that for a lagging power factor load, the voltage collapse very rapidly.