Denmark has the World's highest penetration of grid connected wind power in electricity generation with a share of 15.0% of total domestic demand in 2002 [Danish Energy Authority. Rapport fra arbejdsgruppen om kraftvarme- og VE-elektricitet. Bilagsrapport. Copenhagen: Danish Energy Authority; 2001]. This is unevenly distributed in the two separate electricity systems comprising Denmark, giving a 2003 share as high as 21% in Western Denmark [Eltra. http://www.Eltra.dk. Sk ae rb ae k: Eltra; 2004] compared with a more modest 8% in the more densely populated Eastern Denmark [Elkraft System. Miljoberetning 2004. Ballerup: Elkraft System; 2004]. At the same time, Denmark has other forms of distributed generation, e.g., extensive cogeneration of heat and power (CHP) plants for district heating or for covering industrial heat demands. This results in a high fuel-efficiency but also in a technically complex energy system. This combination of wind power and CHP is a challenge for system operators but also gives opportunities. This article analyses the possibilities for integrating even more wind power using new power balancing strategies that exploit the possibilities given by the existence of CHP plants as well as the potential impact of heat pumps used for district heating and installed for integration purposes. The analyses are made with particular focus on grid stability and delivery of ancillary services (required to control voltage and frequency) and demonstrate that it is possible to accommodate 50% or more wind power without having to rely on import or export for power balancing. Relying on import and export sets demands on the neighbouring countries which may not be met. Compulsion to export or import furthermore gives a poor bargaining position on the electricity market. However, in order to reach such high levels of wind power, the generating equipment must be able to supply ancillary services in contrast to their present abilities. (c) 2005 Elsevier Ltd. All rights reserved.