By considering an idealized model of helically forced flow in an extended domain that allows scale separation, we have investigated the interaction between dynamo action on different spatial scales. The evolution of the magnetic field is studied numerically, from an initial state of weak magnetization, through the kinematic and into the dynamic regime. We show how the choice of initial conditions is a crucial factor in determining the structure of the magnetic field at subsequent times. For a simulation with initial conditions chosen to favour the growth of the small-scale field, the evolution of the large-scale magnetic field can be described in terms of the α-effect of mean field magnetohydrodynamics. We have investigated this feature further by a series of related numerical simulations in smaller domains. Of particular significance is that the results are consistent with the existence of a nonlinearly driven α-effect that becomes saturated at very small amplitudes of the mean magnetic field.