Differential relays are protective devices used in electrical systems to detect faults by comparing the current entering and leaving a particular section of a network. They operate on the principle that, under normal conditions, the incoming and outgoing currents should be equal. When a fault occurs, such as a short circuit, there will be a difference between these currents, triggering the relay to initiate protective actions. This feature is crucial for maintaining system stability and preventing extensive damage in power flow analysis.
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