As wind power penetration increases, large wind farms (WFs) need to provide reactive power according to modern grid codes. Permanent magnet synchronous generator-based wind turbines (WTs) can generate reactive power, by assigning the appropriate reactive power to each WT to meet the reactive power requirements of the grid. This is a more economical method than setting up additional reactive power compensation equipment. This study proposes an optimal reactive power dispatch strategy for minimising a levelised production cost, and is implemented in two ways: minimising the power loss of a WF, and maximising the lifetime of WTs. The reactive power references of each WT are chosen as the optimisation variables, and a particle swarm optimisation algorithm is adopted to solve the optimisation problem. The proposed and traditional reactive power dispatch strategies are demonstrated and compared on a WF with 25 WTs to validate the effectiveness of the proposed approach. (C) 2019 Elsevier Ltd. All rights reserved.