The variable speed engine generator set is interested for an isolated power system due to reduced fuel consumption and less emission. However, because of sluggish dynamic behavior of the internal combustion engine the power quality would be degraded during the sudden load power surge, where the power required by the load is not available by the engine due to the reduced engine speed. An isolated power system based on variable speed engine with a super-capacitor bank can improve dynamic characteristics under such a sudden load change, and power quality, fuel consumption, and pollutants can be improved remarkably. Also, it is verified by the computer simulation that the inverter of 3phase-4leg is compatible to the isolated power system with unbalanced load. In this paper, the feasibility of the system has been verified based on a 26kw commercial diesel engine system.