A coordinated planning model of substation expansion and battery energy storage system (BESS) sizing is proposed, fully considering the effect of BESS charging and discharging on deferring substation expansion. Based on a typical distribution network and its daily load, the objective of the proposed model is to minimize the power purchase costs and the investment and operation costs of BESS and substation. The charging and discharging characteristics of BESS and the network security constraints are included. Candidate discrete/continuous expansion capacity are both considered. It is a multi-period nonlinear mixed-integer programming problem, containing integer variables especially when discrete expansion capacity is considered, which is converted to a continuous optimization problem with complementarities constraints. The decomposed primal-dual interior point method is used to solve the model iteratively and coordinatively, which is decomposed to several single period optimization problems. The case results show that the proposed method can effectively reduce the investment of grid expansion, and optimize the sizing of BESS.