Abstract: Aiming at the difficulty of insulation grounding fault identification of AC power supply, the AC insulation grounding fault simulation method based on arc true embedding is studied, the single-phase ground fault simulation model is established, and the AC insulation fault intelligent identification method based on phase time-frequency feature extraction of wavelet decomposition is proposed.On this basis, the residual current monitoring system of intelligent AC power supply is developed.Through the demonstration application in a smart substation in Hebei Southern Power Grid, the effectiveness of the system insulation fault perception and line selection identification method is verified.The technology proposed in this paper provides an effective solution for the insulation grounding fault monitoring of AC power supply in smart substation.