Existing early fault identification methods have low sensitivity for minor faults, and most identification methods are for offline detection. In this paper, a twin model of three-phase three-column transformer without internal fault is established by using digital twin (DT) technology. Based on a dynamic time warping (DTW) algorithm, a new fault characteristic quantity is proposed, as is an early fault protection scheme. First, a state space model in different operating conditions is established using the structural parameters of physical equipment and actual time electrical quantities, and then the twin model is modified through the actual data to synchronize the virtual with the physical world. A combination of a discrete iteration and Z-transform methods is used to analyze the model. Second, the dynamic time warping algorithm is used to quantify the difference between the predicted quantity and the actual measurement. This is used as the fault characteristic quantity, and a new fault protection scheme is designed to improve the sensitivity of fault identification. Finally, taking a three-phase three-column transformer as an example, the correctness of the model is verified by experiments based on an ANSYS simulation and dynamic model, and the effectiveness of the fault criterion proposed in this paper is verified by several test results.