Wind power generation has increased very rapidly in the past few years. The total U.S. wind power capacity by the end of 2001 was 4,260 megawatts. As wind power capacity increases, it becomes increasingly important to study the impact of wind farm output on the surrounding power networks. In this paper, we attempt to simulate a wind farm by including the properties of the wind turbine, the wind speed time series, the characteristics of surrounding power network, and reactive power compensation. Mechanical stress and fatigue load of the wind turbine components are beyond the scope this paper. The paper emphasizes the impact of the wind farms on the electrical side of the power network. A typical wind farm with variable speed wind turbines connected to an existing power grid is investigated. Different control strategies for feeding wind energy into the power network are investigated, and the advantages and disadvantages are presented.