In the circulating current protection scheme, the summation current of the current transformers (CTs) flows through the operating coil of the relay. When current passes through the relay coils, it indicates the presence of short - circuit current in the CTs' secondaries. Consequently, the relay sends a signal to the circuit breakers, prompting them to open their contacts and isolate the faulty section of the electrical system.
However, a significant drawback of this protection scheme is that iron - cored current transformers can cause the relay to malfunction during external faults. The magnetic characteristics of iron - cored CTs may lead to unequal current transformation ratios under abnormal conditions, resulting in false tripping of the relay.
The voltage differential protection relay scheme employs coreless CTs, which offer improved linearity compared to their iron - cored counterparts. Linear couplers are utilized to increase the number of turns on the secondary sides of these CTs, enhancing the sensitivity and accuracy of the protection system.
In this setup, the secondary relays are connected in series via pilot wires. Additionally, the relay coil is also connected in series with the second terminal of the relevant circuit. This configuration allows for a more precise comparison of electrical quantities, enabling the protection system to accurately detect and respond to internal faults while remaining immune to the effects that cause false operations in traditional iron - cored CT - based schemes.

In a fault - free electrical system or when an external fault occurs, the algebraic sum of the secondary currents of the current transformers (CTs) equals zero. This balance is due to the normal flow of current through the system's healthy components, with the CTs accurately reflecting the current distribution. However, when an internal fault develops within the protected zone, the normal current flow is disrupted. Fault current then passes through the differential relay, disrupting the previously balanced current state.
Upon detecting this abnormal current flow, the differential relay activates. It promptly issues a command to the associated circuit breakers, instructing them to open their contacts. By quickly isolating the faulty section of the system, the differential protection mechanism effectively prevents further damage to equipment and ensures the stability of the overall electrical system. This rapid response helps minimize downtime and potential hazards, safeguarding the integrity of the power grid.