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Wind energy application in electric power systems continues to increase globally. The contribution of wind farms to the overall system reliability is limited by the uncertainty in power output from these highly variable energy sources. The ability of a power system to absorb available wind energy and maintain the system reliability and stability is reduced as the wind penetration in the system is increased. It therefore becomes important to coordinate the operation of wind power with fast responding conventional generating units. Hydro facilities with energy storage capability can alleviate the impact of wind power fluctuations and also contribute to system adequacy. A methodology for an energy limited hydro plant and wind farm coordination is developed using a Monte Carlo simulation technique considering the chronological variation in the wind, water and the energy demand. The IEEE four-state model is incorporated in the developed technique to recognize the intermittent operation of hydro units. The proposed approach is applied to the IEEE-RTS, and quantitative assessment of reliability benefits from effective utilization of wind and water resources are conducted through a range of studies. The effects of major system parameters on the system adequacy are also investigated.