One of the methods to reduce the cost of peak-time generation is by using a battery energy storage system (BESS). To effectively utilize BESS, its installation must be considered carefully since incorrect site placement will result in increasing grid losses and reducing the benefits of BESS. This paper presents the application of loss sensitivity factor (LSF) to obtain the optimal placement of BESS. The approach will be based on a novel approach considering the charging and discharging period of BESS. The optimization process aims to minimize grid losses when BESS is installed. The performance of the proposed method is validated by using IEEE RTS-96 24 bus system. The results obtained show that this novel approach can significantly minimize the grid losses compared to the conventional LSF approach. Learn more