This paper presents an analysis on using an on-board energy storage device (ESD) for enhancing braking energy re-use in electrified railway transportation. A simulation model was developed in the programming language C++ to help with the sizing of the ESD. The simulation model based on the mathematical description has been proposed for a train equipped with on-board ESD for analysis of effectiveness of its application. A case study was carried out for a metro line taking into consideration train characteristics, track alignment, line velocity limits and a running time table. This case study was used to assess the energy savings and perform a cost-benefit analysis for different sizes of the on-board ESD by applying the proposed approach. It was shown that when additional environmental benefits (reduction of CO2 emissions) are considered, this may significantly improve effectiveness of the investments due to CO2 European Emission allowances.