The Figure of the Substation may be found here.

This system shows a 132kV incoming feeder, which is connected to a 132/66kV transformer at the substation. The arrester is place between the feeder and the transformer.

It should be noted that the rating of the arrester is 120kV. Since the system is 132kV, and a tolerance of 10% is assumed, then the maximum voltage that the system can experience is

132kV * 1.1 = 145200V.

However, the system is effectively earthed (via the arrester) and for an effectively earthed system, the maximum arrester voltage is 80% of the system voltage. Thus,

Normal Arrester voltage = 145200 * 0.8 = 120000 = 120kV.
 

If a lightning strike occurs on the incoming feeder, three scenarios are possible.

1st Scenario: Impulse voltage of lightning strike is less than the Discharge Voltage of the Arrester

• In this case, the lightning strike impulse never exceeds 350kV.
• The traveling impulse wave passes into the substation.
• Since the BIL of the transformer is much greater than the peak voltage magnitude of the lightning impulse, the transformer is not damaged.

• In this case, the lightning strike peak voltage is such that 350kV < Vpeak < 650kV.
• Assume that the impulse is 600kV as shownhere.
• As the magnitude of the traveling impulse rises to 350kV, as it moves to the arrester, discharge begins to take place.
• The wave is clipped at 350kV as shown here .
• This clipped wave passes to the substation and since the BIL of the transformer is greater than 350kV, the transformer is not damaged.
• The balance of energy (600 - 350 = 250kV worth of energy) is discharged to ground.

• In this case, the lightning strike peak voltage is greater than 650kV.
• Since the peak voltage is greater than he BIL of the incoming feeder and the arrester, both are damaged.
• The arrester experiences flashover or disruptive charge and is destroyed.
• Since it is destroyed, and open circuit occurs between the incoming feeder and the transformer.
• None of the lightning impulse therefore reaches the transformer at the substation.
• The transformer therefore remains undamaged.