Modular converter has been gaining in popularity in converter system design for modern wind turbines in order to
achieve high reliability and cost-effectiveness in service life. In this study, the reliability and optimization of a novel
topology of fault-tolerant modular converter system are investigated. In this architecture, a converter system
comprises identical and interchangeable basic modules. Each basic module can operate in either AC/DC or DC/AC mode,
depending on whether it operates on the generator side or the grid side. Moreover, each module can be reconfigured from one side to the other, depending on the system’s operational requirements. This paper focuses on the system optimization of the modular converter system with considerations of life cycle cost and performance. Both Markov model and Monte Carlo simulation are utilized in system reliability analysis. Due to stochastic characteristics of wind speed, a converter system is allowed to operate under a degraded state in this study in order to increase the cost-effectiveness in designed life. The approach developed in this paper is applicable to seeking the optimal solution of other fault-tolerant systems in design stage by considering performance and life cycle cost.