Keeping the bus voltage within acceptable limits depends on dispatching reactive power. Power quality improves as a result of creating an effective power flow system, which also helps to reduce power loss. Therefore, optimal reactive power dispatch (ORPD) studies aim at designing appropriate system configurations to enable a reliable operation of power systems. Establishment of such a configuration is handled through control variables in power systems. Various control variables, such as adjusting generator bus voltages, transformer tap locations, and switchable shunt capacitor sizes, are utilized to achieve this objective. Additionally, the integration of wind power can greatly impact power quality and mitigate power loss. In this study, the Grey Wolf Optimization (GWO) approach was applied to the ORPD issue for the first time to discover the best placement of newly installed wind power in the power system while taking into account tap changer settings, shunt capacitor sizes, and generated power levels. The main objective was to determine optimal wind placement to minimize power loss and voltage deviation, while maintaining control variables within specified limits. On the basis of IEEE 30-bus and IEEE 118-bus systems, the performance of the proposed method was investigated. The results demonstrated the superiority of GWO in multiple scenarios. In IEEE-30, GWO outperformed the PSO, GA, ABC, OGSA, HBMO, and HFA methods, reducing total loss by 10.36%, 18.03%, 9.19%, 7.13%, 5.23%, and 7.73%, respectively, and voltage deviation by 68.00%, 1.59%, 36.34%, 41.97%, 46.29%, and 71.08%, respectively. In wind integration scenarios, GWO achieved the simultaneous reduction of power loss and voltage deviation. In IEEE-118, GWO outperformed the ABC, PSO, GSA, and CFA methods, reducing power loss by approximately 19.91%, 16.83%, 14.09%, and 4.36%, respectively, and voltage deviation by 8.50%, 14.15%, 16.19%, and 7.17%, respectively. These promising results highlighted the potential of the GWO algorithm to facilitate the integration of renewable energy sources, and its role in promoting sustainable energy solutions. In addition, this study conducted an analysis to investigate site-specific wind placement by using the Weibull distribution function and commercial wind turbines.