Extensive field experience in micro-hydroelectric systems in remote rural communities demonstrates that the use of a typical automatic voltage regulator (AVR), as supplied with a brushless self-exciting synchronous alternator, can be the cause of unsatisfactory system performance. This paper presents results from experiments undertaken on a full-scale micro-hydroelectric test rig as well as system modelling with PSCAD. The source of the instability is considered to stem from the similar time constants of the ballast load frequency controller and the AVR as two competing feedback control systems. System modelling is used to verify steady state operating points, and confirms that the under-frequency roll-off characteristic of the AVR also contributes to unsatisfactory performance. Crown Copyright (c) 2006 Published by Elsevier Ltd. All rights reserved.