Distributed diesel generation is still widely used to supply electric power in a variety of applications. These applications range from backup power supply systems and combined wind-diesel generation to providing power in places where grid connection is either technically impractical or financially uneconomic. Due to the ever increasing cost of diesel fuel and the environmental issues associated with its use, the optimisation of these AC generators and the reduction of fuel consumption is vital. Modelling and optimisation of such systems as a whole has always been extremely difficult due to the long-time load profiles needed and the computational difficulty of associating small time-constant electrical dynamics with large time-constant mechanical dynamics. This paper presents the use of an accelerated dynamic modelling technique which is able to accurately model these long-time load profiles and overcome these computational difficulties. These models are combined with measured efficiency characteristics and an optimisation algorithm in order to optimise a distributed generation power pack and substantially reduce fuel consumption.