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Wind-diesel systems represent a proactive step towards sustainable remote communities. However, for high ratios of wind energy, the necessity of a dump load and the diesel operating constraints need to be considered. Energy storage systems offer a means of optimizing energy use and further reducing consumption of diesel fuel. This paper proposes a methodology for storage sizing based on stochastic optimization. The problem is formulated and solved using representative data. The dependence of storage sizing and the cost of delivered energy on wind penetration levels, storage efficiency, and diesel operating strategies are considered. Results demonstrate that for high wind penetration, the availability of storage, together with an appropriate diesel operating approach, can result in significant cost savings in terms of fuel and operating costs.