In recent years, the electric power industry around the world is changing continuously due to transformation from regulated market structure to deregulated market structure. The main aim of the transformation of electric supply industry under open access environment is to overcome the some of the limitations faced by the vertically integrated system. It is believed that this transformation will bring in new technologies, integration of other sources of energy such as wind, solar, fuel cells, bio-gas, etc., which are self sustainable and competitive, and better choice for the consumers and so on. As a result, several new issues and challenges have emerged. One of the main issues in power systems is to support reactive power for maintaining the system voltage profile with an acceptable margin of security and reliability required for system operation. In this context, the thesis addresses some of the problems related to planning and operation of reactive power in power systems. Studies are mainly focused on steady state operation of grid systems, grid connected wind farms and distribution systems as well. The reactive power support and loss allocation using Y-bus approach is proposed. It computes the reactive power contribution from various reactive sources to meet the reactive load demand and losses. Further, the allocation of reactive power loss to load or sink buses is also computed. Detailed case studies are carried out on 11-bus equivalent system of Indian southern region power grid under different loading conditions and also tested on 259-bus equivalent system of Indian western region power grid. A comparative analysis is also carried out with the proportional sharing principle and one of the circuit based approach in the literature to highlight the features of the proposed approach. A new reactive power loss index is proposed for identification of weak buses in the system. The new index is computed from the proposed Y-bus approach for the system under intact condition as well as some severe contingencies cases. Fuzzy logic approach is used to select the important and severe line contingencies from the contingency list. The validation of weak load buses identification from the proposed reactive power loss index with that from other well known existing methods in the literature such as Q-V sensitivity based modal analysis and continuation power flow method is carried out to demonstrate the effectiveness of the proposed index. Then, a short-term reactive power procurement/optimal reactive power dispatch analysis is also carried out to determine the optimum size of the reactive compensation devices to be placed at the weak buses for reactive compensation performance analysis in the system. The proposed approach is illustrated on a sample 5-bus system, and tested on sample 10-bus equivalent system and 72-bus equivalent system of Indian southern region power grid. A comprehensive power flow analysis of PQ type models for wind turbine generating units is presented. The different PQ type models of fixed/semi-variable speed wind turbine generating units are considered for the studies. In addition, the variable speed wind turbine generating units are considered in fixed power factor mode of operation. Based on these models, a comparative analysis is carried out to assess the impact of wind generation on distribution and transmission systems. 27-bus equivalent distribution test system, 93-bus equivalent test system and SR 297-bus equivalent grid connected wind system are considered for the studies. Lastly, reactive power coordination for voltage stability improvement in grid connected wind farms with different types of wind turbine generating units based on fuzzy logic approach is presented. In the proposed approach, the load bus voltage deviation is minimized by changing the reactive power controllers according to their sensitivity using fuzzy set theory. The fixed/semi-variable speed wind turbine generating units are also considered in the studies because of its impact on overall system voltage performance even though they do not support the system for voltage unlike variable speed wind generators. 297-bus equivalent and 417-bus equivalent grid connected wind systems are considered to present the simulation results. A comparative analysis is also carried out with the conventional linear programming based reactive power optimization technique to highlight the features of the proposed approach.