Neutral Transfer

Yes, but momentarily.

If utility and DG neutrals are connected both, then it may result in circulating current in the system through neutral during load unbalance.

I don't quite understand that.

Consider a Y secondary primary feed from a trasformer with neutral grounded.

Assume the DG neutral is connected to the same neutral and ground.

If the three power phases are open before the transfer, and there is a load imbalance, the neutral is still at ground potential at the point of common connection.

However, if the neutral point of common connection is "not common", then the neutral at the DG would float above ground potential, but there would be no circulating current unless the DG neutral was also grounded independently.

Dear GW,

Transfer from DG to utility supply involves synchronizing the two sources first and then opening the breaker of desired power supply.

If, DG is AMF (Auto on Mains Failure) type, then yes what you have explained is correct.

I understand that. Thanks.

My point of reference was a small 600V 75KW DG for a Fish Hatchery that auto starts on mains power failure (AMF). I did not switch the Neutral or the grounds, but did transfer (switch) all three phases. The OP had me doubting what I did, but the transfer switch came with just the three phases.

(We used to annually lose 1000's of fish on mains failure. One year it was 100% lost - approx 250,000 fish. Ten years ago we installed the DG and the loss due to power failure is now 0.)