The economic benefit realized from energy storage units on the electric grid is linked to the control policy selected to govern grid operations. Thus, the optimal sizing and placement (OSP) of such units is also dependent on the operating policy of the power network. In this work, we first introduce economic model predictive control (EMPC) as a viable economic dispatch policy for transmission networks with energy storage. However, the numeric basis of EMPC makes it ill-suited for the OSP problem. In contrast, the method of economic linear optimal control (ELOC) can be easily adapted to the OSP problem. However, the relaxation of point-wise-in-time constraints, inherent to ELOC, will introduce a systematic underestimation of operating costs. Thus, we introduce a 2-step OSP algorithm that begins with the ELOC-based approach to determine the placement of energy storage units. Then, an EMPC-based gradient search is used to determine optimal sizes. (C) 2017 Published by Elsevier Ltd.