What does a differential relay shut down in case of a fault?

A differential relay is specifically designed to detect imbalances in electrical current between two or more circuits, indicating a fault in the equipment. When these imbalances are detected, the relay will activate to protect the equipment by shutting down only the affected circuitry, thus isolating the fault from the rest of the system. This selective shutdown minimizes disruptions and protects the overall integrity of the power system.

In the context of the choices provided, the correct answer aligns with the function of the differential relay as it focuses on protecting the equipment directly involved in the fault, rather than the entire system. The other options do not accurately describe the function of a differential relay. For instance, the entire power system would not be shut down to prevent unnecessary power loss and service interruptions when only localized protection is required.