In photovoltaic hydrogen production systems equipped with energy storage, accurate identification and precise localization of faults are critical for ensuring safe and stable operation. To address the issues of low accuracy and poor rapidity in fault identification and localization in short-distance DC transmission systems, a dual-terminal traveling wave fault location method based on wavelet transform (WT) and Teager-Kaiser energy operator (TKEO) is proposed. First, the fault signal undergoes wavelet transform, denoised using soft thresholding, and then reconstructed. Feature information of each wavelet decomposition layer is extracted and analyzed, and the fault type is determined based on the energy ratio between high- and low-frequency decomposition layers. Subsequently, the TKEO method is applied to extract the instantaneous energy spectrum from the wavelet-decomposed signal, accurately identifying the sampling points where the first wavefront arrives at both ends of the DC line. A dual-terminal location method is then employed to precisely calculate the fault distance. Finally, the proposed method is validated through simulations in a photovoltaic-based DC hydrogen production system modeled in MATLAB/Simulink. The results demonstrate that the proposed method achieves high accuracy in both fault identification and localization.