The main objective of the work described in this paper is to offer a new method of prediction of wind speeds, whilst aware that the method develops predictions in time-scales that can vary from a few minutes to an hour. This is needed because wind energy generation is increasing its participation in energy distribution and has to compete with other energy sources that are not so variable in terms of generated active power. It is important to consider that active power demand can vary quite rapidly and different sources of electricity generation must be available. In the case of wind energy, wind speed predictions are an important tool to help producers make the best decisions when selling the energy produced. These decisions are crucial in the electricity market, because of the economic benefits for producers and consequently their profitability, depends on them. The algorithm presented in this paper is based on an artificial neural network and two types of wind data have been used to test the algorithm. In the first, data was collected from a not very windy area; in the second data was collected from a real wind farm located in Navarre (North of Spain), and the values vary from very low to high speeds. Although the algorithm was not tested with typical wind speed values measured on offshore wind farm applications, it can be concluded from the first set of results presented in this paper that the algorithm is valid for estimating average speed values. Finally, a generic algorithm for the active power generation of a wind farm is presented. (C) 2004 Elsevier Ltd. All rights reserved.