The invention provides a monitoring device special for power equipment and a monitoring method based on the monitoring device special for the power equipment. The monitoring device special for the power equipment at least comprises a shell, a protection module, a positioning module, a microprocessor, a storage module, a communication module and a monitoring module, wherein the protection module, the positioning module, the microprocessor, the storage module, the communication module and the monitoring module are located in the shell. The shell comprises an upper shell, a lower shell and a bottom plate, a circuit board is fixedly installed in the lower shell through screws, and the protection module, the positioning module, the microprocessor, the storage module, the communication module and the monitoring module are all installed on the circuit board. The monitoring device is high in integration level, high in reliability, simple in structure, convenient to install and manufacture and low in cost, the monitoring method can monitor the position and the operation state of the power equipment in real time, monitoring data are comprehensive, and the monitoring data can be transmitted to a background server in real time.