Over the last decade there has been a rapid global increase in wind power stimulated by energy and climate policies. However, as wind power is inherently variable and stochastic over a range of time scales, additional system balancing is required to ensure system reliability and stability. This paper reviews the technical, policy and market challenges to achieving ambitious wind power penetration targets in Ireland¿s All-Island Grid and examines a number of measures proposed to address these challenges. Current government policy in Ireland is to address these challenges with additional grid reinforcement, interconnection and open-cycle gas plant. More recently smart grid combined with demand side management and electric vehicles have also been presented as options to mitigate the variability of wind power. In addition, the transmission system operators have developed wind farm specific grid codes requiring improved turbine controls and wind power forecasting techniques.