In recent years, the battery energy storage system (BESS) has been considered as a promising solution for mitigating wind turbine generator intermittencies. In this paper, optimal location and capacity of the BESS with wind power penetrations, and charging/discharging dispatches of BESS are determined using inherited competitive swarm optimization (ICSO) algorithm while improving the performance of the unbalanced distribution network subject to technical constraints. The strategy uses the average load of the feeder as the deciding criterion for charging or discharging the battery. The sustainable average load (SAL) charging method is utilized to charge the battery. The free-running and conservative discharging methods of the battery are studied. The proposed methodology is investigated on IEEE 37 bus unbalanced radial distribution system. The application results show that the proposed methodology enhances various performance objectives of distribution system by optimally coordinating the dispatches of BESS.