The objective of this paper is to investigate the effects on utilisation of existing hydropower in a region of investing in significant wind-power in the region within the present network. Policy simulations are conducted using a dynamic system-wide model that is calibrated to reflect the structure of the Nordic power market. This model is the one used by the Norwegian electricity regulator and large hydropower companies in Norway for scheduling of hydro and market analyses. Simulations are carried out for different inflow situations based on past observations going back 60 years. introduction of wind-power leads to significant increase in network congestion in the region, lower hydropower production, higher level of storage, increased spillage of water, and considerably lower price level in the local region in question. (C) 2008 Elsevier Ltd. All rights reserved.