Isolated communities are progressively integrating renewable generation to reduce the societal, economic and ecological cost of diesel generation. Unfortunately, as renewable penetration and load variability increase, systems require greater diesel generation reserves, constraining renewable utilisation. Improved diesel generator flexibility can reduce the requirement for diesel reserves, allowing increased renewable hosting. Regrettably, it is uncommon for utilities to modify diesel generator control during the integration of renewable source generation. Identifying diesel generator flexibility and co-ordination as an essential component to optimising system hosting capacity, this paper investigates improved diesel generator flexibility and coordination via low-load diesel application. Case study comparisons for both high- and low-penetration hybrid diesel power systems are presented in King Island, Australia, and Moloka`i, Hawai`i, respectively. For King Island, the approach details a 50% reduction in storage requirement, while for Moloka`i the application supports a 27% increase in renewable hosting capacity.