In this study we explore for the USA and OECD Europe (OECD Europe includes the countries that participate in the Organisation of Economic Cooperation and Development, among which Western Europe, USA and Japan) dynamic changes in electricity production, cost and CO2 emissions when intermittent electricity sources are used with increasing penetration levels. The methodology developed can be applied for both solar photovoltaic (PV) and wind energy. Here the focus of the results is on penetration of wind electricity in the electricity system as simulated in a long-term model experiment in which the electricity demand is kept constant over time. All important parameter are included in a sensitivity analysis. With increasing penetration levels the cost reduction of wind electricity caused by upscaling and technological learning is counteracted by the cost increase due to (1) the need for additional back-up capacity, (2) the need to generate wind electricity at less favourable sites, and (3) discarded wind electricity because of supply-demand mismatch. This occurs after about 20% wind electricity production as percentage of current electricity production. At this level about 500 (OECD Europe) and 750 (USA) TWh yr(-1) wind electricity is absorbed in the system with the electricity demand of the year 2000. Wind electricity is found to be discarded when the production is about 55 (USA) to 10 times (OECD Europe) the present electricity produced from wind power. Beyond 30% of present electricity production, cost increases most significantly because of discarded wind electricity, excluding storage. In both regions the use of wind electricity would mainly avoid use of natural gas. The CO2 emissions abatement costs range from 14 (OECD Europe) to 33 (USA) $ per ton CO2 differ in both regions due to a faster wind electricity cost increase in OECD Europe. (c) 2006 Elsevier Ltd. All rights reserved.