Windmills are high capital, low fuel cost plant,whose output is intermittent, difficult to predict from one moment to the next, and yet statistically correlated to the output from other devices which are separated geographically. In that conventional plants used for electricity generation are often characterised as sources of firm power which is controllable, windmills are often viewed very differently from conventional plant. The economic evaluation of windmills has, in the past, reflected this perceived difference. In this thesis the methods that have commonly been used to evaluate the economics of wind power have been examined critically, as have the methods and planning models used for the economic evaluation of conventional power plant. A mathematical model is introduced which can be used in evaluating the economics of both intermittent energy sources and conventional plant,and this model is used throughout the thesis for detailed calculations of the production costs of electricity generation systems which employ wind powered plant. Less detailed but more versatile mathematical models are also introduced and these are used to examine the sensitivity of the economics of windmills to changes in fossil fuel prices, wind turbine performance, maintenance and capital costs. Results from these studies are used in examining the economics of windmills in the UK,and in predicting the optimal design of wind turbines for use with a given utility system.