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A novel control strategy for a stand-alone induction generator (IG), working with variable speed and load, is proposed. The IG is simultaneously excited by a capacitor and an inverter. The capacitor provides the rated reactive current needed to excite the IG while the inverter adds the reactive current needed to regulate the IG output voltage. The control strategy is based on the instantaneous reactive power theory. A 4 kW laboratory prototype has been built to validate the proposal and experimental results are presented.