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The paper describes a simulator study of a veritcal axis wind turbine generator connected to a small isolated hydro network. The connection to the network is done through a back-to-back de link, which is used as a static frequency changer. The penetration level of the wind turbine is in the range 13-33 percent of the rating of the ac network. The study includes the transient performance of the de link and the wind turbine drive during electrical braking and for system disturbances such as ac system faults. The study shows that the use of a stabilization signal in the de link helps to reduce large torsional vibrations in the wind turbine low speed shaft. These vibrations are observed after ac system faults. The study also shows that it is possible to obtain satisfactory operation of the overall system by adopting suitable control strategies. The study was performed as part of a Research Project (223G342) for the Canadian Electrical Association (CEA).