In order to reduce loader engine installed power and save energy, we designed the driving scheme of power system for parallel hybrid loader by Analysis of different way of connection between diesel engine and electric motor. We chose ISG power electric multifunction and super capacitor as the core component to design the Loader auxiliary power system and movable arm cylinder gravitational potential energy recovery system. We established ADVISOR software model of hybrid power Loader, and the simulation results show that diesel engine installed power of the hybrid power Loader is reduced by 21%; fuel consumption is reduced by 9.2%. Through optimize control strategy, the diesel engine can always working in high efficient area or idle area. Practical application shows that this design scheme has the potential economic and environmental benefits.