A system includes a source side converter for being electrically coupled to a generator of a power source, a line side converter for being electrically coupled to a power network, a DC link coupled between the source side converter and the line side converter, and a controller for generating source side switching signals based on a current or torque of the generator and a virtual impedance signal for system damping or reactive power compensation when at least one detected signal of the system is not normal. A method for controlling the system is also included.