Grid connected energy storage systems are regarded as promising solutions for providing ancillary services to electricity networks and to play an important role in the development of smart grids. Thus far, the more mature battery technologies have been installed in pilot projects and studies have indicated their main advantages and shortcomings. The main concerns for wide adoption are the overall cost, the limited number of charging cycles (or lifetime), the depth of discharge, the low energy density and the sustainability of materials used. Vanadium Redox Flow Batteries (VRFB) are a promising option to mitigate many of these shortcomings, and demonstration projects using this technology are being implemented both in Europe and in the USA. This study presents a model using MATLAB/Simulink, to demonstrate how a VRFB based storage device can provide multi-ancillary services, focusing on frequency regulation and peak-shaving functions. The study presents a storage system at a medium voltage substation and considers a small grid load profile, originating from a residential neighbourhood and fast charging stations demand. The model also includes an inverter controller that provides a net power output from the battery system, in order to offer both services simultaneously. Simulation results show that the VRFB storage device can regulate frequency effectively due to its fast response time, while still performing peak-shaving services. VRFB potential in grid connected systems is discussed to increase awareness of decision makers, while identifying the main challenges for wider implementation of storage systems, particularly related to market structure and standardisation requirements.