The present study introduces a subtraction-average-based optimization algorithm (SAOA), a unique enhanced evolutionary technique for solving engineering optimization problems. The typical SAOA works by subtracting the average of searcher agents from the position of population members in the search space. To increase searching capabilities, this study proposes an improved SAO (ISAO) that incorporates a cooperative learning technique based on the leader solution. First, after considering testing on different standard mathematical benchmark functions, the proposed ISAOA is assessed in comparison to the standard SAOA. The simulation results declare that the proposed ISAOA establishes great superiority over the standard SAOA. Additionally, the proposed ISAOA is adopted to handle power system applications for Thyristor Controlled Series Capacitor (TCSC) allocation-based losses reduction in electrical power grids. The SAOA and the proposed ISAOA are employed to optimally size the TCSCs and simultaneously select their installed transmission lines. Both are compared to two recent algorithms, the Artificial Ecosystem Optimizer (AEO) and AQuila Algorithm (AQA), and two other effective and well-known algorithms, the Grey Wolf Optimizer (GWO) and Particle Swarm Optimizer (PSO). In three separate case studies, the standard IEEE-30 bus system is used for this purpose while considering varying numbers of TCSC devices that will be deployed. The suggested ISAOA’s simulated implementations claim significant power loss reductions for the three analyzed situations compared to the GWO, AEO, PSO, and AQA.