With the increase of renewable energy permeability and the development of distributed grid, energy storage plays an increasingly important role in the power system. A lot of studies have shown that energy storage can already be economically feasible. However, most previous studies concentrated on the value of energy storage in the free electricity market. In China, the power grid monopolizes the process of electricity transmission, distribution and retail, and the feed-in tariff and retail prices of electricity are regulated by government. It is difficult to analyze the application value of energy storage for China's electricity due to the lacking of data. The major contribution of this paper is to evaluate the application value according to the data of a provincial power grid. The results support the argument that energy storage can generate positive returns. The optimal storage capacity and operational strategy are also discussed in this paper. (C) 2018 Elsevier Ltd. All rights reserved.