We compare two models to determine the size of grid units and dispatch in a wind-diesel power system with hydrogen storage. Both take as data 1-year time series of hourly wind speed and electricity demand, and their objective is to minimise cost. Our first model, based on linear programming, generates as output a combination of capacities and a year time series for the dispatch variables. Our second model runs a fixed dispatch rule over several capacity combinations and selects the cheapest option. The dispatch rule can then be improved through comparison with the linear programming solution. At present costs, the hydrogen storage-conversion system is excluded from the solutions, so the interesting operation rules associated with the option of harvesting do not arise. However, the costs of hydrogen storage technologies are decreasing with investment. By running our model with prospective costs for year 2010, we see storage emerge in the optimum, and thus a sample of the operation patterns that will occur in a renewable dominated grid. (c) 2005 Elsevier Ltd. All rights reserved.