The increasing implementation of renewable energy sources (RES), along with the diversity of energy source types, has additionally imposed significant operational and management problems in distribution networks. These problems are manifested in voltage regulations, system stability and coordination of protection, both in the distribution and transmission networks. For the medium voltage (MV) network, this includes new energy sources and higher amounts of fault currents, invisibility of several faults in the existing protection scheme, reduction of the range of protection devices and reduction of the possibility of detecting small fault currents with existing protection relays. Such changes significantly reduce the possibility of proper distribution system protection, both in subordinate and superior networks. The subject of this paper is the presentation of a new concept of the use of automation in the management and arrangement of power system protection dependent on the scheme and configuration of an active MV network. The goals of this analysis and research are to find and define the necessary architecture in which the scheme and appearance of the MV network should be automatically detected, and based on network topology to establish new settings of protection devices (ground fault, overcurrent and short circuit protection). The contributions of generation units of RES in the MV network must be considered. This paper specifically analyses the problems of power system management with simultaneous harmonization of protection systems both in the transmission and in the radial distribution network, offering optimization algorithms that have the ability of achieving the optimal solution. The implementation of the proposed technique was tested on a radial connection integrated with a microgrid (MG) which has the possibility of two-way power supply. The obtained results indicate that the proposed technique can solve described problems in the coordination of protection system and network management, even with the dynamic character of operation mode of the networks.