At modest penetration, wind power merely Substitutes electricity generated typically at thermal power plants. In this case, wind power only provides economic benefits in terms of saved marginal fuel and operation and maintenance costs. At higher penetrations, it becomes increasingly important for the energy system to be able to operate without costly reserve capacity awaiting fluctuations in demand or wind power generation. Existing transmission interconnections have mainly been established in order to assist in reducing the reserve capacity of thermal power systems. While indeed relevant in thermal systems, this is typically even more important in renewable energy-based systems, in which fluctuations to a large extent are uncontrollable. This makes interconnected systems an interesting option for integrating electricity produced from such energy sources. Using a Danish example, this article demonstrates how different demand and wind production variations in different geographical areas assist in evening out fluctuations and reducing imbalances in systems with high penetrations of wind power. By exploiting these variations, the needs for reserve capacity and condensing mode power generation are reduced. However, the article also demonstrates that there are limits to what can be gained on this account. (C) 2008 Elsevier Ltd. All rights reserved.