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This paper presents the generalized dynamic modeling of self-excited induction generator (SEIG) using state-space approach. The proposed dynamic model consists of induction generator, self-excitation capacitance and load model are expressed in stationary d-q reference frame with the actual saturation curve of the machine. An artificial neural network (ANN)-model is implemented to estimate the machine magnetizing inductance based on the knowledge of magnetizing current. The dynamic performance of SEIG is investigated under no load, with the load, perturbation of load, short circuit at stator terminals, and variation of prime mover speed, variation of capacitance value by considering the effect of main and cross-flux saturation. During voltage buildup the variation in magnetizing inductance is taken into consideration. The performance of SEIG system under various conditions as mentioned above are simulated using MATLAB/SIMULINK and the simulation results demonstrates the feasibility of the proposed system.