Hourly mean wind-speed data for the period 1986-1997 [except the years 1989 (some data is missing) and 1991 (Gulf War)] recorded at the solar radiation and meteorological monitoring station, Dhahran (26 degrees C 32＇ N, 50 degrees 13＇ E), Saudi Arabia, have been analyzed to investigate the optimum size of battery storage capacity for hybrid (wind + diesel) energy conversion systems at Dhahran. The monthly average wind speeds for Dhahran range from 4.12 to 6.42 m/s. As a case study, the hybrid system considered in the present analysis consists of two 10 kW Wind Energy Conversion Systems (WECS), together with a battery storage system and a diesel backup. The yearly and monthly average energy generated from the above hybrid system have been presented. More importantly, the study explores the impact of variation of battery storage capacity on hybrid power generation. The results exhibit a trade-off between size of the storage capacity and diesel power to be generated to cope with specific annual load distribution [41,500 kWh], and for given energy generation from WECS. The energy to be generated from the backup diesel generator and the number of operational hours of the diesel system to meet a specific annual electrical energy demand have also been presented. The diesel back-up system is operated at times when the power generated from WECS fails to satisfy the load and when the battery storage is depleted. The present study shows that for economic considerations, for optimum use of battery storage and for optimum operation of diesel system, storage capacity equivalent to one to three days of maximum monthly average daily demand needs to be used. It has been found that the diesel energy to be generated without any storage is considerably high; however, use of one day of battery storage reduces diesel energy generation by about 35%; also the number of hours of operation of the diesel system are reduced by about 52%.