With the advent of microgrids (MG) and increasing use of renewable energy sources (RES), conventional low voltage networks change their structure from passive to active. The inherent oscillation nature of RESs, such as wind turbine units (WT), can lead to adverse effects such as power quality and system stability issues. therefore, the use of energy storage systems (ESSs) becomes one feasible solution to mitigate the output power fluctuations of the WT unit. In this paper, a Battery Energy Storage System (BESS) is used in order to smooth the power fluctuations based on a two-level control strategy include active power smoothing and reactive power compensation and also power management system. Various signal processing methods are applied to power smoothing level, and among all of them, the continuous wavelet transform (CWT) demonstrated the best performance. The effectiveness of the control strategy is verified using MATLAB/Simulink software.