The embodiment of the invention provides an on-line failure recovery method and a system. The method comprises steps of establishing a power grid simulation model comprising a spare power automatic switching device, designating a power grid section, designating a total load of a power grid based on the designated power grid section, designating an imaginary failure comprising an imaginary failure object, and generating a failure recovery plan for the designated imaginary failure, wherein the power grid simulation model comprises a power grid topology and power grid sections; and the failure recovery plan at least comprises a failure isolation measure and a load transfer measure. The method and the system simulate and analyze the failure based on some power grid section of the power grid simulation model, and generate the failure recovery plan for the designated imaginary failure. Therefore, when the imaginary failure occurs really or is to occur, scheduling personnel can quickly recover the power grid according to the failure recovery plan.