High penetration of wind energy requires innovations in different areas of power engineering. Methods for improving wind energy and power system interconnection, control, and operation are proposed in this dissertation. A feed-forward transient compensation control scheme is proposed to enhance the low-voltage ride-through capability of wind turbines equipped with doubly fed induction generators. Stator-voltage transient compensation terms are introduced to suppress rotor-current overshoots and torque ripples during grid faults. A dynamic stochastic optimal power flow control scheme is proposed to optimally reroute real-time active and reactive power flow in the presence of high variability and uncertainty. The performance of the proposed power flow control scheme is demonstrated in test power systems with large wind plants. A combined energy-and-reserve wind market scheme is proposed to reduce wind production uncertainty. Variable wind reserve products are created to absorb part of the wind production variation. These fast wind reserve products can then be used to regulate system frequency and improve system security.