The paper deals with experimental identification of transformer internal faults, an important factor in reliability and sustainability of power supply systems. Task of identification of transformer internal faults requires increasing sensitivity of relay protection by calculation of components most sensitive to interwire faults from transformer current. In order to study internal faults in transformer, the model in Simulink MATLAB was developed on the basis of transformer constitutive equations. Transformer with short circuited wires was simulated as a multiwinding transformer. We provide the calculation of transformer parameters. Model was applied for analysis of transients in power transformers, such as interwire fault, transformer inrush, and fault in transformer connections. Analysis of power transformer internal faults by means of time-dependent symmetrical components of currents is provided. These symmetrical components were calculated for the first harmonic of current by means of discrimination of firs harmonic by low-pass filter and compensating elements implementing phase shift. Described method allows calculation of symmetrical components during transient and under non-sinusoidal conditions. Simulation results showed the advantage of instantaneous symmetrical components of other direct values. Those components were implemented in relay protection algorithms for identification of internal faults in transformers.