With the advancements in wind turbine technologies, the cost of wind energy has become competitive with other fuel-based generation resources. Due to the price hike of fossil fuel and the concern of global warming, the development of wind power has rapidly progressed over the last decade. The annual growth rate has exceeded 26% since the 1990s. Many countries have set a goal for high penetration levels of wind generation. Recently, several large-scale wind generation projects have been implemented all over the world. It is economically beneficial to integrate very large amounts of wind capacity in power systems. Unlike other traditional generation facilities, using wind turbines presents technical challenges in producing continuous and controllable electric power. A distinct feature of wind energy is its nature of being ldquointermittent.rdquo Since it is difficult to predict and control the output of wind generation, its potential impacts on the electric grid are different from the traditional energy sources. At a high penetration level, an extrafast response reserve capacity is needed to cover the shortfall of generation when a sudden deficit of wind takes place. To enable a proper management of the uncertainty, this paper presents an approach to make wind power become a more reliable source on both energy and capacity by using energy storage devices. Combining the wind power generation system with energy storage will reduce fluctuation of wind power. Since it requires capital investment for the storage system, it is important to estimate the reasonable storage capacities for the desired applications. In addition, an energy storage application for reducing the output variation during the gust wind is also studied.