Adding inductive reactance from neutral point to ground is called the reactance grounding. The inductive reactance is called the reactor.
Using reactance it is possible to limit the three phase fault current of in order of kA to a relatively low value in order of 200-800 ampere. Even after adding of low reactance to neutral it is not ensured that whether it is reactance grounding or not. The following criteria must be fulfilled to ensure it is reactance grounding.
At the time of fault the ratio of zero sequence impedance to positive sequence impedance is greater than 3.
Xₒ/X1 > 3
After fault the reactance of the system in addition to the reactance added to neutral may have resonance during fault. To avoid this, ratio of zero sequence impedance to positive sequence impedance must be equal to or less than 3.
Xₒ/X1 ≤ 3
During fault clearing the ratio of zero sequence impedance to positive sequence impedance is greater than 3.
Xₒ/X1 > 3
In synchronous generator the ground fault currents are higher thanm the three phase current at the terminals. The high fault current cause excessive heating in the generator winding. To limit the fault current low reactance in the neutral circuit is added,
In transmission and distribution systems, without directly connected rotating machines, the neutrals of the transformers are usually effectively grounded.
The phase-to-ground fault current should be in the range of 25% to 100% of the three-phase fault current. ground fault current less than 25% of the three phase current may cause damage due to transient overvoltages. Choose the value of reactance needed to limit the ground-fault current to the preferred amount.
The ratio is
Xₒ/X1 = 10 when 25%
Xₒ/X1 = 1 when 100%
Xₒ/X1 = 3 when 60%
Limiting the ground-fault current to 60% of the three-phase fault current is the borderline between effective grounding and reactance grounding.
When installing a 100% reactor in a generator neutral, the system is not reactance grounded but effective grounded, by definition, and the maximum fault-current contribution of this generator to a line-to-ground fault anywhere in the system outside of the generator will be its three-phase fault current.
Cons of Reactive grounding
The inductance connected between the neutral and ground may resonates with the shunt capacitance to ground under arcing ground fault conditions. Under this condition it creates very high transient overvolatges on electrical power system. This is similar to the the phenomenon happens with ungrounded system. To avoid this, at leat 60 % of the three phase current must flow through the reactor. If the three phase current is 20,000A, 6000 ampere current must flow through the reactor. Thus, very high current flow through the reactor to avoid the condition of transient overvoltages, and therefore reactance grounding is rarely used.