A fault monitoring system for an electrical substation includes one or more arrays of acoustic sensors placed around a substation boundary and configured to measure acoustic pressure waves. A processing circuitry in the fault monitoring system localizes and identifies faults in the substation and includes a sound source localization module to identify an area of a sound source based on the acoustic pressure waves. A beamforming module of processing circuitry provides enhanced acoustic pressure waves by eliminating background noise and interfering noise from the acoustic pressure waves and a component signature classification module in the processing circuitry compares enhanced acoustic pressure waves with component signatures to classify the acoustic pressure waves into various events to detect faults in the electrical substation.