The objective of this work is to discuss the concept of back-to-back interconnection systems with energy storage, especially with a Superconducting Magnetic Energy Storage (SMES) incorporated into a back-to-back DC link. In this case, each converter of the back-to-back system is used as a power conditioning system for the SMES coils. Since the AC-DC converter can be designed independently of the frequency of the power system, a two-way switch is connected to the AC side of each converter. This two-way switch can select the interconnected power systems. By using the two-way switches, this system can provide the stored energy in the SMES system to each interconnected power system through two AC-DC converters. For instance, lower-cost power of each power network can be stored through two converters during the off-peak hours and made available for dispatch to each power network during periods of demand peak. Then this system increases the reliability of electric power networks and enables the economical operations depending on the power demand. This paper describes the unique operations of the back-to-back interconnection with SMES and discuses the optimal SMES configuration for a 300-MW-class back-to-back interconnection. (c) 2008 Wiley Periodicals, Inc.