I. Introduction
When protection operation and settings are analysed, usually only a small part of the complex power system is considered. Even if the unit protection operates correctly in the defined time, the influence of the changed network topology after removing faulted element can cause inadmissible or even unstable operating condition. Additionally, the selection of the relay operating characteristics and their parameter settings is usually based on steady state calculations [1], where the dynamic conditions are neglected or considered only as a safety margin. This is particularly critical when new protection algorithms and schemes are developed and tested. In the paper these drawbacks are somehow relaxed with the interaction of dynamic power system and protective relaying. The protection parameter settings are based on actual network dynamic transient and fault calculations. Two types of numerical relays, both used in the high voltage level, were considered: the conceptually new proposition of the transformer differential relay based on orthogonal decomposition in the time domain. and the active and reactive power balance and distance relay based on the least-square method [2].