In this paper, the optimal scheduling for an energy storage system (ESS) is proposed for redispatching the conventional generation, considering the aspects of economy and reliability. The aim of the optimal scheduling problem is to achieve a maximum benefit including minimal fuel as well as ESS aging costs, while satisfying a specific reliability constraint. In terms of the reliability evaluation, the reliability constraint is newly formularized for ESS to have a higher state of charge (SOC) level than the minimum SOC level required to satisfy a specific reliability level over time. In addition, the life time and capacity degradation of the ESS, its major characteristics, are also formularized and considered in order to express the ESS aging cost. The optimal scheduling problem is solved by the proposed tracing method, which is based on dynamic programming and is formulated using the cumulative transition matrix. The proposed method is demonstrated using data from various generating units including renewable energy resources (RES) and an ESS, for four cases, to verify the proposed method. (C) 2017 Elsevier Ltd. All rights reserved.