With a large number of distributed new energy electronic devices connected to the power grid, traditional relay protection methods for power systems are no longer applicable. By analyzing the actual operating conditions of the power system, a set of protection settings with optimal comprehensive performance can be obtained, which can ensure the safe and stable operation of the entire power system. Aiming at the problems of insufficient stability and low setting efficiency in current relay protection methods, a new energy grid protection setting optimization method based on multi-objective discrete gray wolf optimization algorithm is proposed. Taking the protection sensitivity, speed, and reliability of distributed power grid access as constraints, a multi-objective optimization model with optimal sensitivity and shortest setting time is constructed, The optimal protection setting is obtained to ensure the safe and stable operation of the entire power system. Finally, experimental verification shows that the proposed method has faster convergence speed and higher optimization efficiency compared to traditional protection setting methods and protection setting methods based on genetic algorithms, and can be well applied to power system relay protection.