Abstract This paper presents a methodology for the optimal location, selection, and operation of battery energy storage systems (BESSs) and renewable distributed generators (DGs) in medium–low voltage distribution systems. A mixed-integer non-linear programming model is presented to formulate the problem, and a planning-operation decomposition methodology is proposed to solve it. The proposed methodology is separated into two problems (planning and operation problems). The planning problem is related to the location and selection of these devices, and the operation problem is responsible for finding the optimal BESS operating scheme. For solving the planning problem is used a simulated annealing algorithm with a defined neighborhood structure that uses a sensitivity analysis based on the Zbus matrix. A novel decomposition method, which guarantees near-global-optimal solutions with low computational effort, is proposed for solving the operation problem. The effectiveness and accuracy of the proposed decomposition method is validated and tested on an 11-node test system from the specialized literature, and the robustness of the proposed method is assessed and tested on a modified version of an IEEE 135-node test system. The proposed planning-operation decomposition methodology is tested on a real medium–low voltage distribution system of 230 nodes. To verify the efficiency of the proposed methodology, four cases are compared: (I) without BESS and DGs, (II) with DGs, (III) with BESS, and (IV) with BESS and DGs. The numerical results demonstrate the effectiveness and robustness of the proposed methodology.