To achieve China’s “dual carbon” goal, integrating large-scale renewable energy into power grids has become an irreversible trend. With the continuous increase in the use of renewable energy, the wind and solar power integration poses critical challenges to the stable operation of the power system. With the perfect dynamic response of active and reactive power, energy storage system can smooth power fluctuations caused by intermittent and uncertain renewable energy, which is conducive to promoting the access of large-scale new energy, realizing the smooth load regulation, and improving the interactive friendliness of the power grid. First, starting from the development of energy storage technology, this paper introduces the domestic and foreign research status of energy storage participating in the auxiliary service market of power peak regulation and frequency modulation. Then, it conducts a comprehensive review on the optimization configuration of energy storage systems taking into account peak shaving and frequency regulation requirements, analyzing from two perspectives: single-type setup and hybrid energy storage. Additionally, it summarizes the solving algorithms for the optimal configuration of energy storage systems. Afterwards, it proposes a grid-friendly new power system based on energy storage participation, and elaborates on collaborative scheduling methods and control strategies in multiple time scales and multiple regions from the perspective of collaborative operation. Finally, it provides an outlook on the future research direction of energy storage from four aspects, which are shared cloud energy storage, numerical intelligent aggregation modeling,intelligent and adaptive control technology, and improving multi-regional cooperation and standardization policy mechanism.