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The paper analyses a system of autonomous induction generator directly feeding ,without a d.c link, an induction motor. The generator is driven by a wind energy turbine and the motor is driving a water pump. The analysis is based upon a mathematical model that accounts for the various nonlinearities and mutual interactions of the system elements. Investigations of such a system revealed that it can be controlled to extract the maximum available wind energy by proper adjustment of the terminal voltage of the generator. The required control strategy is formulated, then it is implemented by a static VAR controller which supplies the induction generator with necessary reactive power.