This paper explained the application of a lithium-ion battery energy storage system to electric propulsion ships. The power distribution in electric propulsion ships has low power quality because of the variation in the power consumption of the propulsion motor. For proper operation of the ship, the power quality needs to be improved, and the battery energy storage system is used to solve power-quality problems. The simulation models of electric propulsion ship and battery energy storage systems are constructed on MATLAB/Simulink to verify the improvement in power quality. The proposed system is applied in various scenarios of the propulsion motor state. The power quality achieved by using the battery energy storage system in both voltage and frequency satisfies the standards set by IEC-60092/101.