The invention relates to controlling a power generating unit. Aspects of the invention include determining a virtual impedance value (Zvir), determining a virtual grid power (Pvsm) based on the virtual resistance value (Rvir) and the grid current (Igrid), determining a virtual synchronous machine rotational speed (ωVSM) and/or a synchronous machine angle (θVSM) of a virtual synchronous generator, and determining a voltage reference (Vabc) for controlling a line side converter to generate the desired reactive power (Qgrid) based on the virtual synchronous machine rotational speed or angle (ωVSM, θVSM), a virtual voltage (ΔVαβ, ΔVdq) and the voltage magnitude reference (Vqref).