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Renewable energy is an effective and clean source of supplying electrical loads especially in remote and rural areas. This paper deals with the small signal stability analysis of the tidal current turbine with direct drive permanent magnet synchronous generator (DDPMSG) and its integration into the grid. DDPMSG is used with and without PI controller and tested in both cases for small signal stability analysis. The Eigenvalues of the overall system show the importance of the PI controller for securing the system stability.