Fault Level in Transformer with OLTC

Choose whichever is the least impedance; i.e., worst case scenario.

Perhaps I am reading this question wrong or misinterpreting your rather rude tone (it has been a really LONG day).

Do you mean IEC 60909-0 ? I am assuming from the information supplied you are a paid project consultant or transformer company designer? What do YOU think the answer is (the answer is obvious to me by the way).

Why don't you refer to IEC 60909-0 and have a think about it yourself or contract me or some other suitably qualified Engineer to offer you services as a paid consultant.

Just out of curiosity, if OLTC is the abbreviation for On-Load Tap Changer, what is the abbreviation for Off-Load Tap Changer? Inquiring minds want to know....

OCTC -- off circuit tap changer. Atleast this is the way it is called in bangalore (india)

In the US it's NLTC (No Load Tap Changer).

"...percentage impedance changes with the tap changing and fault level reduced when impedance changes...", this is only true if the tap changer is always started at one end of its range.

Short circuit studies are extra conservative; i.e., you want the conditions that provide the worst case scenario, therefore you assume that the tap is set to the end of its range that provides the highest short circuit current (you do know which end that is, don't you?)

On the other hand for load-flow, relaying/breaker coordination, and voltage studies the actual tap setting is very important and will have a major effect on the accuracy of the results.

Obviously do it for the worst case scenario. That is, for the tap with least impedance.