This study presents the modelling and dynamic simulation of a high penetration wind diesel power system (WDPS) consisting of a diesel generator (DG), a wind turbine generator (WTG), consumer load, dump load and a battery energy storage system (BESS). First the WDPS architecture and the models of the WDPS components are described. The WDPS is simulated in wind-only (WO) mode where the DG is not running and the WTG supply active power and in wind-diesel (WD) mode where both DG and WTG supply power. The simulation results are given showing graphs of the main electric variables in the WDPS (system frequency and voltage and active power in each component) and main battery variables (current, voltage and state of charge). The results in the WO mode show how the BESS, under the command of a proportional-integral-derivative (PID) controller, supplies/stores active power to regulate the isolated system frequency. The WD control enables the BESS to smooth the load and wind power variations, so that the isolated system power quality is improved. Also it is shown in the WD mode a peak shaving application where the control orders the BESS to supply active power temporarily to support system frequency in a DG overload situation.