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Power loss due to the Joule effect in a distribution system can be very large. where the loss on TRs can account for a consid-erable portion. This paper proposes a method for optimal placement of capacitor banks to TRs for power loss reduction in radial distribution systems. The problem is modeled as maximizing the NPV of the capacitor installation project subject to certain constraints and is formulated as an MIP model based on an explicit formula for direct calculation of the power loss of the radial distribution system. The model can be solved by commercial MIP packages very efficiently. The proposed methodology has been practically implemented in Macau MV distribution system. Its application to a portion of Macau system is illustrated in this paper. and the results show that by installing capacitor banks at optimized locations. the power loss of the network can be significantly reduced. the voltage level can be improved. and a positive large NPV can be obtained. which adds values to the utility.
