This thesis studies the impact of large amounts of wind power on the Nordic electricity system. The impact on both the technical operation of the power system and the electricity market are investigated.

The variability of wind power is reduced when looking at a large interconnected system with geographically dispersed wind power production. In the Nordic countries, the aggregated wind power production will stay between 1-90 % of the installed capacity and the hourly step changes will be within ±5 % of the installed capacity for most of the time. The reserve requirement for the system, due to wind power, is determined by combining the variations with varying electricity consumption. The increase in reserve requirement is mostly seen on the 15 minutes to 1 hour time scale. The operating reserves in the Nordic countries should be increased by an amount corresponding to about 2 % of wind power capacity when wind power produces 10 % of yearly gross demand. The increased cost of regulation is of the order of 1 €/MWh at 10 % penetration and 2 €/MWh at 20 % penetration. This cost is halved if the investment costs for new reserve capacity are omitted and only the increased use of reserves is taken into account. In addition, prediction errors in wind power day ahead will appear in the regulating power market to an extent which depends on how much they affect the system net balance and how much the balance responsible players will correct the deviations before the actual operating hour.

Simulations of increasing wind power in the Nordic electricity system show that wind power would mainly replace coal fired production and increase transmission between the areas within the Nordic countries and from Nordic countries to Central Europe. The CO2 emissions decrease from an initial 700 gCO2/kWh to 620 gCO2/kWh at 12 % penetration. High penetrations of wind power will lower the Nordpool spot market prices by about 2 €/MWh per 10 TWh/a added wind production (10 TWh/a is 3 % of gross demand).