The invention provides a battery energy storage system for peak load shifting and a control method thereof. The system comprises M energy storage modules, wherein M energy storage modules are mutually connected in parallel, each energy storage module comprises a battery pack and a bi-directional converter, the direct current end of the bi-directional converter is connected with the battery pack, the alternating current end of the bi-directional converter is connected with a power grid, and M is the integer greater than 1; and a monitoring module, wherein the monitoring module is respectively connected with the battery pack and bi-directional converter in each energy storage module, the monitoring module is used for obtaining the charging and discharging power demand curve and current stress optical coefficients (SOC) of M battery packs, and performing the start and stop control and power distribution to M energy storage modules according to the charging and discharging power demand curve, the current SOC of M battery packs and the power-efficiency curve of each energy storage module. The system is formed by connecting multiple energy storage modules in parallel, so the peak load shifting capacity is enhanced, the stability and safety of the power grid are obviously improved, and the redundancy and applicability of the system are improved.