Fault diagnosis is crucial for the operation of energy systems such as nuclear plants, and heavily relies on various types of sensors for temperature, pressure, concentration, etc. Due to the redundancy of sensors in each energy system, the sensor selection scheme can deeply influence the diagnostic efficiency. In this paper, a Boolean network (BN) with its linear representation is proposed for describing the fault propagation among sensors. Both the sufficient condition of fault detectability and that of fault discriminability are given. Then, a sensor selection method for fault detection and discrimination is proposed. Finally, the theoretic result is applied to realize the diagnosis oriented sensor selection for a nuclear steam supply system based on a modular high temperature gas-cooled reactor (MHTGR). The computation and simulation results verify the correctness of the theoretical results.