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The paper presents a new approach for islanding detection in distributed generation (DG) using rate of change of phase angle difference (ROCPAD). The process starts with retrieving the voltage and current signals at the DG end and estimating the phasors (amplitude, phase, and frequency) using synchronous transformation based algorithm. The next step is to compute the phase angle difference and the ROCPAD for registering islanding detection. The proposed algorithm is compared with the widely used rate of change of frequency relays (ROCOF) and found working effectively in the situations where ROCOF fails. The proposed ROCPAD relay is tested on standard microgrid structures with possible variations in operating parameters and the results indicate that the ROCPAD relay can reliably detect islanding conditions in large microgrids.