A method for estimating grid strength of a power grid connected to a renewable energy farm having a plurality of renewable energy power systems includes measuring, at least, a voltage, an active power, and a reactive power at a point of interconnection of the renewable energy farm to the power grid. The method also includes determining a sensitivity of the voltage to at least one of the active power or the reactive power at the point of interconnection. Further, the method includes determining the grid strength of the power grid as a function of the sensitivity of the voltage to at least one of the active power or the reactive power at the point of interconnection. In addition, the method includes dynamically determining at least one of an active power command or a reactive power command for the renewable energy farm at the point of interconnection based on the grid strength. Moreover, the method includes distributing at least one of the active power command or the reactive power command to individual controllers of the plurality of renewable energy power systems and a farm-level controller of the renewable energy farm.