Circulating current in parallel transformers

When two transformers are in a parallel group, a transformer with a higher tap position will typically have a higher (LV side) no-load voltage than the other one with a lower tap position. These unequal no-load voltages (unequal tap positions) will cause a circulating current to flow through the parallel connected transformers. A transformer with higher no-load voltage (typically higher tap position) will produce circulating current, while a transformer with lower no-load voltage (typically lower tap position) will receive circulating current.

When load is connected on these two parallel transformers, the circulating current will remain the same, but now it will be superimposed on the load current in each transformer, i.e. for a transformer producing circulating current, this will be added to its load current, and for a transformer receiving circulating current, this will be subtracted from its load current.

Thus voltage control of parallel transformers with the circulating current method aims to minimize the circulating current while keeping the voltage at the target value.

In case of a parallel operation of transformers, the electric current carried by these transformers are inversely proportional to their internal impedance. Think of it as two parallel impedances in a simple circuit behind a voltage source, you will have equal currents through each impedance only if you have two identical impedances, in some cases as stated above, tapping could be a problem, the other one is the actual manufacturing tolerances which could diverge by almost 5-10%, if the transformers are manufactured by different suppliers or not within the same batch. So, the difference in current between the currents through these two impedances is basically the circulating current as it is not seen outside these parallel impedances.

The currents that are produces due to magnetic flux circulation in the core are called eddy currents and these eddy currents are responsible for core losses in transformer.
While the circulating currents are the zero sequence currents that may be produces due to following causes.
1- when there is three phase transformer the (3rd, 5th, 7th....) harmonic currents which are called zero sequence currents from all the three winding of three phase transformer add up and become considerable even in loaded conditions these currents have no path in Y/Y connection of transformer so a tertiary winding is provided co conduct these currents but in Y/d or D/y connection these currents circulate in delta winding.
2- Whenever there is unbalanced loading in transformer. In which with positive sequence, negative sequence and zero sequence currents are also produced which cause circulating currents.
3- When the transformer banks are used and the transformers have phase between them then circulating currents are produced between them, than transformers in the bank get loaded without being shearing the power to the load.