A differential relay is a protective device that detects imbalances in incoming and outgoing currents, safeguarding transformers, generators, motors, and busbars. Principle of Operation: These relays activate based on discrepancies in electrical quantities. Core idea: Differential protection compares current entering and leaving a CT-defined protected zone. What controls it: CT location, CT polarity, CT ratio, transformer. Differential protection is a unit protection technique used in power systems to safeguard equipment like What is Differential Protection? Where are the Differential Protection methods and Relays used? Why Differential Protection is called Unit Protection? Transmission lines.