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The problem of capacitor placement on a radial distribution system is formulated and a solution algorithm is proposed. The location, type, and size of capacitors, voltage constraints, and load variations are considered. The objective of capacitor placement is peak power and energy loss reduction, taking into account the cost of the capacitors. The problem is formulated as a mixed integer programming problem. The power flows in the system are explicitly represented, and the voltage constraints are incorporated. A solution method has been implemented that decomposes the problem into a master problem and a slave problem. The master problem is used to determine the location of the capacitors. The slave problem is used by the master problem to determine the type and size of the capacitors placed on the system. In solving the slave problem, and efficient phase I-phase II algorithm is used.>
Baran et al. (1989) studied this question.