An analysis of the energy conversion system which consists of a propeller water turbine, a permanent magnet synchronous generator and a power electronic converter is presented. The considered control strategy implements an optimizing technique that guarantees maximal average efficiency independently of hydrological condition changes through the constant search for optimal operation parameters. The water flow parameter, essential for objective function estimation, is eliminated by the dedicated control technique. The control method is implemented and tested in the model created in the Matlab/Simulink software. All characteristics and parameters were identified on a real small hydropower plant and on the special laboratory model.