The standalone three phase system for power quality improvement of both the load side voltages as well as the currents of the machine terminal is presented in this paper. This standalone system consists of a three-phase permanent magnet synchronous generator (PMSG) driven by governor-less hydro turbine as a three-phase source feeding the sensitive/non-linear/linear loads, connected via a unified power quality conditioner (UPQC). The UPQC consists of a back-to-back connected voltage source converters (VSCs) sharing a common DC bus. The series compensator of the UPQC is used to eliminate voltage power quality (PQ) and to maintain the sinusoidal, balanced, and constant amplitude voltages at load terminals irrespective of any variation in the system. Moreover, the current quality such as reactive power compensation, harmonics elimination, etc. are provided by the shunt compensator of the UPQC, simultaneously while improving voltage quality issues. In addition, the efficiency of the overall system is significantly improved by running the generator below its rated voltage and reduces the losses by operating at unity pf. The system frequency and the generated voltage magnitudes are maintained during any load fluctuation or imbalance loading. The model of the UPQC based hydro turbine driven PMSG system is developed in the Simulink-MATLAB environment, and its results are presented for analysis. The validation of the system is also done on the hardware prototype, and it performs effectively for the voltage and current PQ enhancement simultaneously. It significantly improves the PQs at the generator terminals and ensures to adhere the IEC-61727 and the IEEE-519 standards even with either balanced or unbalanced loads.