This study describes a laboratory model of a battery energy storage system (BESS) designed for testing algorithms aimed at reducing peak power consumption in railway traction substations. The system comprises a DC/DC converter and battery energy storage. This article details a laboratory model of a bidirectional buck-boost DC/DC converter, which is used to transfer energy between the battery energy storage and a DC line. It presents an analysis of DC/DC converter systems along with simulation studies. Furthermore, the results of laboratory tests on the DC/DC converter model are also provided. The control algorithm of the system in the traction substation is focused on reducing peak power, offering benefits such as lower charges for the railway operator due to the possibility of reducing contracted power requirements. From the perspective of the power grid, the reduction in power fluctuations and, consequently, voltage sags, is advantageous. This paper includes a description of a hardware simulator for verifying the system’s control algorithms. The verification of the control algorithms was performed through experimental tests conducted on a laboratory model (a hardware simulator) of the system for dynamic load reduction in traction substations, on a power scale of 1:1000 (5.5 kW). The experimental tests on the laboratory model (hardware simulator) demonstrated the effectiveness of the algorithm in reducing the peak power drawn from the power source.