The main problem for transformer protection is still how to identify inrush current. Inrush current contains a lot of harmonic components and some useful information is found in these harmonics

such as the magnitude

frequency and energy. The paper puts forward an expression for energy of a certain component based on Prony algorithm. It is found that the ratio of fundamental energy to second harmonic energy in the internal fault current is much larger than that in the inrush current. Thus a novel method is proposed to discriminate the inrush current from the internal fault current. Simulation results show that the method is effective and has better performance than the traditional methods.