Permanent magnet (PM) machines are often preferred in recent technology since their efficiency and power/volume ratio are higher than those of conventional wound-rotor type machines. NdFeB magnets, which are predominantly used in the design of PM machines, are very expensive and make the design costly. Alnico magnets have the potential to be used instead, since they are very cheap and their residual fluxes are as high as those of NdFeB magnets. The major problem is that Alnico magnets have very low resistance to magnetic field reversal, which means they are easily demagnetized. This paper focuses on using Alnico magnets in a PM reluctance generator (PMRG) without encountering demagnetization or performance degradation. The converter accompanying the PMRG allows avoidance of the demagnetization of Alnico magnets by making the currents through the windings unidirectional. Thus, Alnico magnets can be directly used instead of NdFeB magnets without making any modifications on the magnet size or location. The converter also provides independent phase current control to suppress mechanical vibrations due to large torque ripples. The analysis results verify that Alnico magnets can be used in the generator design without losing much generator performance. Therefore, the Alnico-magnet-based PMRG is a promising candidate for designing low-cost generators and is also expected to affect the design trends on wind energy conversion systems (WECSs). (c) 2018 Institute of Electrical Engineers of Japan. Published by John Wiley & Sons, Inc.