The basic idea of model-based diagnosis is to exploit knowledge about the structure and behaviour of the physical system to be diagnosed in order to identify diagnoses from discrepancies between observed and predicted behaviour. In this paper, we describe the application of model-based diagnosis to the problem of fault localisation in power transmission networks. We also show that the resulting system, DPNet, has an extended competence w.r.t. rule-based approaches (treatment of unknown and multiple faults) while requiring less development effort because of the use of component libraries in the model-based approach.