In Australian medium voltage (MV) distribution networks, the majority of embedded local generation (LG) uses synchronous machine based technology. LG units with a synchronous generator can easily be dispatched and controlled to provide or absorb reactive power and thereby locally supporting the system voltage and increasing the voltage stability margin. The fast response from a synchronous machine based LG unit exciter will ensure fast voltage recovery. This will significantly improve the transient voltage stability. Also, the synchronous machine based LG units can provide inertial support to the system. Furthermore, some of these LG technologies work as standby power supplies all over the world. However, there can be dynamic interactions between nearby synchronous machine based LG units leading to significant rotor swings. It is mainly because of (a) low inertia coefficient associated with the machines and (b) the operation of excitation system deteriorates the damping of oscillations that follow the first rotor swing after the perturbation where a fast responding excitation system can reduce the damping torque component. This paper demonstrates modelling MV distribution systems using MATLAB-SimuLink and conventional modelling technique for investigating inter-unit electro-mechanical oscillations in nearby LG units.