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This study presents a method to protect the zonal distribution system proposed for future ships when fault occurs. By utilising a bus interface unit, the energy storage and grid interface within it provide one benefit that an independent fault protection scheme can be achieved. The new protection scheme is based on active impedance estimation. This technique actively imposes small transient disturbances onto the system at a point of measurement to excite the system in real time and estimate the system impedance at that point. The continuous wavelet transform is employed to achieve accurate impedance estimation over a broad frequency range from a small amount and very noisy data. The performance of this proposed technique is investigated both by simulation and experiment. The scheme exploits the increased use of power electronic devices to provide a useful complement to traditional protection strategies, which can also provide the necessary back up protection during extreme protection failure, without the need for communication channels.