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What happens when a Dyn transformer grounding fails? The transformer has mixed loads (1phase, 3phase) also unbalanced. It is going to act as an isolation transformer or ...? Will the phase and line voltages remain the same?

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If the ground connection opens in a grounded neutral system, nothing much will happen assuming that there are no other problems. It will not influence the balance or imbalance of the system. There will be some high impedance paths to ground such as capacitance between grounded metal and wiring, motor windings etc. The voltage from any point in the system will be determined by those ground connections. Any ground fault that occurs will not trip any circuit breaker or blow any fuse. The fault connection will then define the voltage to ground at other points in the system.

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