Differential protection functions when the vector difference of two or more similar
electrical magnitudes exceeds a predetermined value. Almost any type of relay can
function as differential protection – it is not so much the construction of the relay
that is important but rather its method of connection in the circuit. The majority of
the applications of differential relays are of the current-differential type, but they
can also be of the voltage-differential type, operating on the same principle as the
current relays; the difference lies in the fact that the operating signal is derived
from a voltage across a shunt resistance.