The work presented in this paper is carried out with the objective of identifying the optimal location and size (Kvar ratings) of shunt capacitors to be placed in radial distribution system, to have overall economy considering the saving due to energy loss minimization. To achieve this objective, a two stage methodology is adopted in this paper. In the first stage, the base case load flow of uncompensated distribution system is carried out. On the basis of base case load flow solution, Nominal voltage magnitudes and Loss Sensitivity Factors are calculated and the weak buses are selected for capacitor placement.In the second stage, Particle Swarm Optimization (PSO) algorithm is used to identify the size of the capacitors to be placed at the selected buses for minimizing the power loss. The developed algorithm is tested for 10-bus, 34-bus and 85-bus Radial Distribution Systems. The results show that there has been an enhancement in voltage profile and reduction in power loss thus resulting in much annual saving.
