This paper investigates the frequency deviation and stability analysis of a small isolated power system in response to various load levels and demand penetration of unit generators. From the analysis an optimal generation unit commitment strategy is presented in terms of system operation and expansion. The proposed strategy aims to prevent unnecessary generation outages due to frequency disturbances in the system and to ensure system security as well as for the integration of wind energy. This paper also demonstrates that the proposed frequency response technique which is fast and simple can be used to calculate the maximum allowable wind penetration for a small isolated power system. (C) 2013 Elsevier Ltd. All rights reserved.