With the advance in wind turbine technologies, the cost of wind energy becomes competitive with other fuel-based generation resources. Due to the price hike of the fossil fuel and the concern of the global warming, the development of wind power has rapidly progressed over the last decade. The annual growth rate has exceeded 26% since 1990s. Many countries have set goal for high penetration levels of wind generations. 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 present technical challenges in producing continuous and controllable electric power. The distinct feature of the wind energy is its nature of " intermittent". Since it is difficult to predict and control the output of the wind generation, its potential impacts on the electric grid are different from the traditional energy sources. At high penetration level, an extra fast response reserve capacity is needed to cover shortfall of generation when a sudden deficit of wind takes place. To enable a proper management of the uncertainty, this study 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 reasonable storage capacities for desired applications. In addition, energy storage application for reducing the output variation during the gust wind is also studied.