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Many high impedance ground faults (HIGF) that happen in a low voltage (LV) system often cause loss of customer supply, fire and human safety hazards. Traditional ground fault protection is provided by residual current circuit breaker (RCCB). The RCCB often causes nuisance tripping and it is difficult to detect HIGF. Wavelet analysis based HIGF protection is developed in the paper. The wavelet transform is applied to filter out some frequency bands of harmonics from residual current and line current. The root mean square (RMS) value of harmonics are calculated using their wavelet coefficients directly. HIGF is identified from disturbance by the RMS difference between the residual current and the line current. The digital protection scheme is designed. EMTP simulation results show that the new protection is able to detect HIGF and prevent electric shock with high sensitivity and robustness.