Since 2004, wind power has had the largest installation of new capacity compared to other energy sources in Sweden. Accommodating new wind power may require strengthening or rebuilding of the existing grid in areas where the grid is already loaded to maximum capacity. This master thesis examine the possibility of a new 400/130 kV substation in Yttermalung, Sweden, with a connection to the two neighboring regional grids in Dalarna and Värmland owned by Fortum. This substation would provide a new connection point to the Swedish transmission system as well as an interconnection of the two, currently separated, regional grids. Different expansion scenarios where a substation with and without series compensation or a phase shifting transformer (PST) to control active power flow were studied. A total of 650MW new wind power farms connected in six different locations were also included in the scenarios. Load flow, contingency studies and fault currents were calculated for the scenarios in the software tool Power System Simulator for Engineering. The study shows that the new substation would improve redundancy of the regional grids, decrease loading of many branches and only affect voltage marginally, however increased fault currents can be expected in stations located close to the new substation. It is possible to connect the modelled wind power farms, provided that power output is regulated at sensitive parts of the grid during critical operating conditions. Värmland’s regional grid experiences unwanted power flow through the system but only during uncritical loading conditions. The unwanted power flow can be prevented, most efficiently by connecting a PST to Värmland’s regional grid. This can also be installed later on after the substation has been commissioned, when the amount of wind power connections require it.