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The intermittency of wind generation and the potential need for adequate transmission expansion are the major concerns in wind generation integration to power system. One solution being considered is to build on-site energy storage with the wind farms. The idea of building such a composite system is not only to minimize the real-time variation of the composite system output, but also to optimize the transmission upgrades needed for delivery of the wind generation. A novel probabilistic reliability assessment method is proposed in this paper for determining the adequate size of on-site energy storage and the transmission upgrades needed in connecting wind generation with the power system. The practical applications of the proposed model are illustrated using the IEEE Reliability Test System (IEEE-RTS).