A method can be used for fault detection of a transmission. The method includes obtaining instantaneous measurements of local voltages and local currents of the transmission line, obtaining filtered measurements of the local voltages and local currents by subjecting the measurements of the local voltages and local currents to low pass filtering, obtaining a compensated voltage calculated by subjecting the filtered measurements to a differential equation based algorithm, and performing fault detection by forming a ratio between the compensated voltage and the a reference voltage. An internal fault is determined when the ratio is below a threshold and an external fault is determined when ratio is larger than above the threshold.