The paper presents a study of the upstream influence of wind farms on the wind speed, which is called blockage effect. A Reynolds Averaged Navier–Stokes (RANS) numerical model using an actuator disc method was devised and validated using the SCADA data from a Horns Rev 1 wind farm. The maximum difference between the average power in the first row for SCADA and the numerical model was 7.8%. The model was used to determine the impact of blockage effect on the wind farm parameters and the extent to which the wind speed and the power generation were reduced. A reference wind farm was defined, with a modified size, spacing, turbine height, and diameter that were used for comparison with other wind farm configurations. The results of the investigation of the wind farm parameter effects on the upstream wind speed reduction are presented in the paper. It has been established that increasing the turbine spacing from 5D to 6.7D reduces the power loss due to blockage by two. Blockage losses are almost eliminated when the spacing is increased two times. Similarly, the wind turbine thrust coefficient (CT) has a large impact on blockage, which is more pronounced, when CT is higher. In fact, the velocity deficit due to blockage is proportional to CT. The turbine tower height has small impact on blockage effect—the power reduction was changed by 0.3% due to blockage for the investigated range. The number of turbines in a row (with a constant number of turbines in a row) does not affect blockage significantly.