This study proposes a Carnot battery system that integrates MgO/Mg(OH)2-thermochemical energy storage (TCES) in a fluidized bed reactor (FBR) with Kalina cycle of a geothermal power plant. In the charge mode, surplus electricity from variable renewable energy is converted into heat and stored through the dehydration of Mg(OH)2. In the discharge mode, the hydration of MgO occurs in the FBR, and the reaction heat is converted into electricity through the Kalina cycle. Dynamic simulations of the charge and discharge modes were conducted using a non-steady state fluidized bed model. Results show the energy storage efficiency and capital cost were 76.4% and 68 USD/MJth for the base case, respectively. Round-trip efficiency and levelized cost of storage were 8.62% and 0.291–0.769 USD/kWhe, respectively, when the charging electricity cost was 0–0.042 USD/kWhe. A cost-competitive Carnot battery system using MgO/Mg(OH)2-TCES with high energy storage density and an easy-to-operate FBR has been developed.