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The role of a battery energy storage system in a unified power-flow control scheme is examined. Analysis shows that the capability of the storage system to support power transmission is governed by the state of discharge (SOD) of the battery. A changeover to a standby battery is necessary once the inservice battery SOD exceeds the level determined from the analytical method described in this paper. The method also permits the battery changeover schedule to be evaluated for a given load demand profile. Furthermore, the capacity of the battery system is determined such that the resulting system operates under an optimal economic dispatch condition, while the transfer capability of the compensated transmission is maximized.