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This paper presents a sensitivity analysis based security constrained optimal power flow (SCOPF) for solving the green field VAr allocation problem. Sensitivity analysis is used to quantify the impact of an incremental change in reactive pattern and various controls on the voltage profiles for a number of power system states. An efficient method for computing all relevant sensitivities is developed for that purpose and incorporated within the LP based SCOPF. The proposed scheme is implemented to optimally allocate reactive power reserves among system generators. Results of the case studies carried out on the IEEE-30 bus system demonstrate the validity of the developed sensitivity analysis based SCOPF method.