Dear Mr charz
Q1. Is the attached arrangement of CTs correct for differential protection of transformer?
A1. In most cases it does't matters whether the CT secondaries are earthed on S1 or S4.
However, all [three CTs] must be earthed [consistently] i.e. either all three S1s or S4s.
Most modern protection relay works well either S1 or S4 is earthed, see advice by Mr HamburgerHelper.
Based on the schematic, Power flows from P1 to P2 and all three S1s are connected to
the protection relay and the kWh "in" (+) terminals. The kWh "out" (-) terminals finally
earthed together with all S4s is [in order].
Attention: The kWh meter needs three-phase voltage input (which is not shown in the
schematic) must also be [correctly phased] and the ["in" and "out"] directions observed.
BTW: From the schematic, it does [not] seems to a " differential protection" . It seems
to me that it is a standard "over-current" protection.
However, if your doubt is on whether to earth the common S1s or S4s, then the correct terminology to be used whether it is a " differential protection" or "over-current" is irrelevant.
Che Kuan Yau (Singapore)