Renewable energy integration has become an integral part of the distribution system. The energy storage devices with the high penetration of wind and solar are becoming key components to support the power mismatch due to intermittency in power available from the renewable sources. The renewable energy sources, along with storage devices, require their optimal placement for the efficient operation of the distribution system. In this paper, the impact of battery energy storage along with Distributed Generation (DG) in the hybrid distribution system, has been analysed. The main contribution of this paper is: (i) optimal siting and sizing of DGs using combined power loss sensitivity index, (ii) optimal position and sizing of battery energy storage based on combined power dispatch strategy, (iii) minimisation of the total power loss and fuel cost of the system. The voltage profile, fuel cost, battery installation cost, size of battery storage, and energy of battery during the charging and discharging have been calculated. The results have been obtained for IEEE-33 bus test system and compared with existing methods in the literature also. An optimisation problem has been solved using the General Algebraic Modeling System (GAMS) and MATLAB interfacing.