Wind energy is a prominent area of application of variable speed generators operating on the constant grid frequency. A modern wind energy system of this type consists of a surface mounted permanent- magnet generator with a frequency converter, which allows variable speed operation. The maximum power capability of the wind energy system is limited by the grid inverter. The theoretical formulation for active and reactive power limits is given. This formulation is used to set power reference limits to the inverter. Two different regions are distinguished depending on the tolerable Ac current harmonic distortion. Experimental results in a variable frequency wind energy generation system are shown. (c) 2005 Elsevier Ltd. All rights reserved.