I’ve heard people say that if magnetic monopoles are ever discovered they could be used for free energy generation.
Well, I cannot see the connection between the two. How would a monopole be used to generate energy?
Who says this? There are a lot of free energy nuts out there with an obsession with magnets.
There is no connection. Magnetic monopoles can no more generate free energy than electric monopoles (i.e., electrons, protons, etc.).
It’s just barely possible that (if they exist), magnetic monopoles could facilitate some non-free energy generation scheme–for instance, some physics models allow them to catalyze proton decay–but even this is fairly unlikely.
Its a silly idea - the idea appears to be
There’s no reason for it.
The is a reason against… the first part isn’t actually a rule, its just an observation that there is no magnetic monopole.
I have a vague memory of it being postulated that energy could be produced by moving the monopoles through normal matter, the monopoles would cause the normal matter to decay producing energy. Something like that may be where the idea comes from.
That still wouldn’t be “free” energy generation of course.
Since the earth has a magnetic field, you could extract the energy released by moving the monopoles to the north or south magnetic poles. Then the free ride would be over.
But the Earth’s magnetic field lines form closed loops through the Earth. Just construct a tube through the Earth from one pole to the other, and your monopole can continue to cycle, extracting energy. 
I’m guessing it’s the proton decay thing, because that’s kind of huge. OK, sure, it wouldn’t be truly literally “free”, but it’d be so much energy for such a low price that it might as well be.
No form of commercially usable energy will ever be “free.”