Most optical hydrogen sensors are based on light intensity measurement and light intensity detection is vulnerable to the light source output and the optical fiber arrangement. To overcome the shortcomings, an optical fiber based sensor based on fiber Bragg grating (FBG) technique which is capable to measure the concentration of hydrogen dissolved is described in this paper. To examine the availability of monitoring initial hydrogen generation, a needle-to-plate partial discharge (PD) model was setup in the lab. The results between wavelength shifts of optical hydrogen sensor well agreed with conventional dissolved gas analysis (DGA), proving a potential utilization in the detection of dissolved hydrogen in power transformer.