When a CT is "saturated", the magnetic path inside the CT operates like a short circuit on the transmission line. Almost all of the energy supplied by the primary winding is shunted away from the secondary winding and is used create a magnetic field inside the CT.

Saturation testing for a current transformer identifies the rated knee point against IEEE or IEC standards, the point at which the transformer is no longer able to output current in proportion to its specified ratio.

Excitation tests are performed by applying an AC voltage to the secondary winding of the CT and increasing the voltage in steps until the CT is in saturation. The "Knee" point is determined by observing a small voltage increase causing a large increase in current.

The test voltage is slowly decreased to zero to de‐magnetize the CT. The test results are plotted on a logarithmic (log‐log) graph and evaluated based on the transition period between normal operation and saturation.

The excitation curve around the points where current jumps up for a small increase of voltage; is very important for comparison of curves with published curves or similar CT curves. The excitation test results should be compared with published manufacturer's data or previous recordings to determine any deviations from previously obtained curves.

IEEE defines the saturation as "the point where the tangent is at 45 degrees to the secondary exciting amperes". Also known as "knee" point. This test verifies that the CT is of correct accuracy rating, has no shorted turns in the CT and no short circuits are present in the primary or secondary windings of the CT under test.