The present invention relates to a protection system with a protection relay and at least one measurement sensor to protect a permanent magnet generator having a plurality of stator windings, each of said stator windings having a first end and a second end. If the stator windings are connected in a wye coupling, they are, in a set of three stator windings, commonly coupled in a star point at the first end of the windings, or if the stator windings are connected in a delta coupling, they are, in a set of three stator windings, commonly connected in a ring to each other. In addition, the at least one measurement sensor is arranged for measuring current through at least one of the stator windings at the star point side or within the ring connection and for communicating with the protection relay. The invention also relates to a method of protecting a permanent magnet generator.