Abstract: With the increasing proportion of distributed generation in the power grid, its impact on reactive power and voltage cannot be ignored because of the instability of its output. First, this paper makes a reactive power optimization from a global perspective, and establishes an optimization model with active power loss minimization as the objective function. Besides, particle swarm algorithm is used to solve the nonlinear problem, and the numerical values of coefficient is improved to optimize the particle swarm algorithm which is easy to get trouble into the local optimum and the speed of which is getting very slow later. Secondly, the local control of reactive power and voltage is carried out through the coordination controller. Finally, through the actual power grid data analysis in Zhejiang Jinhu area, the model and algorithm are proved to be feasible and effective.