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This study presents a novel improved differential evolutionary (IDE) algorithm for optimizing reactive power management (RPM) problems. The effectiveness of IDE algorithm is tested on different unimodal and multimodal benchmark functions. The objective function of the RPM is considered as the minimization of active power losses. Initially, the power flow analysis approach is employed to detect the optimal position of flexible AC transmission system (FACTS) devices. The proposed method is used to determine the optimal value of control variables such as generator's reactive power generation, transformer tap settings, and reactive power sources. Furthermore, the efficacy of the IDE approach is compared with other promising optimization methods such as variants of differential evolution algorithm, moth flame optimization (MFO), brainstorm‐based optimization algorithm (BSOA), and particle swarm optimization (PSO) on various IEEE standard test bus (i.e., IEEE‐30, ‐57, ‐118, and ‐300) systems with active and reactive loading incorporating FACTS devices. A Static VAR compensator (SVC) for shunt compensation and a thyristor‐controlled series compensator (TCSC) for series compensation were used as FACTS devices. The proposed IDE method significantly reduces the active power loss, that is, 55.65% in IEEE 30, 39.68% in IEEE 57, 16.32% in IEEE 118, and 8.56% in IEEE 300 bus system at nominal loading. Finally, the statistical analysis such as Wilcoxon signed‐rank test (WSRT) and ANOVA test were thoroughly analysed to demonstrate the firmness and accuracy of the proposed technique. [ABSTRACT FROM AUTHOR]