This paper focuses on monitoring and predicting the short circuit faults of the rotor windings of large turbo-generator systems. For the purpose of increasing efficiency and decreasing maintenance cost, a method that combines the HHT (Hilbert Huang Transform) with a wavelet has been studied. This method is based on analyzing a classical Albright detecting coil. Due to the Empirical Mode Decomposition (EMD) and the Intrinsic Mode Functions (IMF) of the HHT the exact location of a short circuit of rotor windings may be given. However, a part of the useful information is eliminated by the unreasonable decomposing scale of the wavelet. Based on the thermodynamics modeling method, this study was illustrated with a 50MW turbo-generator system that is installed in Northern China. The analysis results, which have very good agreement with those of a previous study, show that the method of combining the HHT with a wavelet is an effective way to analyze and predict the short circuit faults of the rotor windings of large generators, such as supercritical turbo-generator systems and wind turbo-generator systems. This work can offer a useful reference for analyzing smart grids by improving the power quality of a distribution network that is supplied by a turbo-generator system.