Deploying a high-precision fiber-optic time synchronization network in the power grid can effectively support the safe operation of the grid. Firstly, a fault location model was constructed using the shortest path algorithm to address the complex loop network structure, and the impact of time synchronization on the accuracy of power grid fault location was analyzed. Then, a high-precision fiber-optic time synchronization composite signal transmission technology was proposed. This technology can deploy a high-precision fiber-optic time synchronization network in a complex power grid and ensure high-precision time synchronization of various monitoring nodes in the power grid by accurately transmitting time-frequency signal in the fiber through signal processing. Experimental results show that in time synchronization accuracy tests under normal temperature conditions, the time interval error of the fiber-optic time synchronization network is -10 ps and the time deviation is 35 ps, both of which far exceed the standard requirements. When the fiber works at changing temperatures, this technology can still transmit time-frequency signals with high accuracy in the fiber-optic time synchronization network, maintaining a high degree of time synchronization stability. Therefore, this technology can be applied to power grids in different working environments to improve the accuracy of power grid fault location.