Integration of wind power generation into small islands has been one of the demonstration projects in Okinawa Prefecture. Since such integration could degrade power quality including frequency in an island grid, a frequency stabilizing system using flywheels has been installed into a small island. In order to establish a proper frequency stabilizing scheme for the small island, an accurate model of a diesel generator including governor is vital. Therefore, the model was developed based on the measured values of generator dump tests. A new frequency stabilizing scheme was also developed through time-domain simulation of the island grid model, which consists of the above-mentioned diesel generator model and an equivalent load change representing wind power variation. The proper parameters of the scheme were derived considering role sharing between the diesel generators and the flywheels. The developed stabilizing scheme was applied to the flywheels in the island grid and revealed excellent performance in mitigating frequency variation. © 2012 Wiley Periodicals, Inc. Electr Eng Jpn, 180(1): 24–35, 2012; Published online in Wiley Online Library (wileyonlinelibrary.com). DOI 10.1002/eej.21277