This paper proposes a computationally efficient methodology for the optimal location and sizing of static and switched shunt capacitors in radial distribution systems. The problem is formulated as the maximization of the savings produced by the reduction in energy losses and the avoided costs due to investment deferral in the expansion of the network. The proposed method selects the nodes to be compensated, as well as the optimal capacitor ratings and their operational characteristics, i.e. fixed or switched. After an appropriate linearization, the optimization problem was formulated as a mixed-integer linear problem, suitable for being solved by means of a widespread commercial package. Results of the proposed optimizing method are compared with another recent methodology reported in the literature using two test cases: a 15-bus and a 33-bus distribution network. For the both cases tested, the proposed methodology delivers better solutions indicated by higher loss savings, which are achieved with lower amounts of capacitive compensation. To calculate the energy savings and the deferral investment cost exactly, a load flow for radial distribution network is executed before and after the compensation. The proposed method has also been applied for compensating to an actual radial distribution network served by AES-Venezuela in the metropolitan area of Caracas. A convergence time of about 4 s after 22,298 iterations demonstrates the ability of the proposed methodology for efficiently handling compensation problems.

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