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Global environmental concerns associated with conventional energy generation have led to the rapid growth of wind energy in power systems. Many jurisdictions around the world have set high wind penetration targets in their energy generation mix. Wind speed is variable in nature, and power output from a wind farm is not readily controllable. High wind penetration can lead to high-risk levels in power system reliability and stability. In order to maintain the system stability, wind energy dispatch is usually restricted and energy storage is considered to smooth out the fluctuations and improve supply continuity. The benefits from using energy storage are highly dependent on the operating strategies associated with wind and storage in the power system. A simulation technique that can consider wind farm and energy storage operating strategies is presented. Different operating strategies are compared and the resulting benefits are evaluated. The system impacts of energy storage capacity and operating constraints, wind energy dispatch restrictions, wind penetration level and wind farm location on the reliability benefits from energy storage are illustrated.