One of the most important challenges in the integration of renewable energy sources into the power grid lies in their 'intermittent' nature. The power output of sources like wind and solar varies with time and location due to factors that cannot be controlled by the provider. Two strategies have been proposed to hedge against this variability: 1) use energy storage systems to effectively average the produced power over time; 2) exploit distributed generation to effectively average production

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... r location. We introduce a network model to study the optimal use of storage and transmission resources in the presence of random energy sources. We propose a Linear-Quadratic based methodology to design control strategies, and we show that these strategies are asymptotically optimal for some simple network topologies. For these topologies, the dependence of optimal performance on storage and transmission capacity is explicitly quantified.