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A tree had fallen down and taken out the electric line with a huge bang! So all the electric went off.

Then I noticed loads of black powder/soot around a surge protector extension cable. It looks like a small explosion, with everything around it covered in black soot. I'm just wondering what it was? Is that what happens when there is a surge?

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Surge protectors which I've seen worked in a similar way. Once it triggers, the electric arc inside it burns out the internals and produces lots of black powder.

The MOV http://en.wikipedia.org/wiki/Varistor in them can act like a sacrificial component.

A varistor remains non-conductive as a shunt-mode device during normal operation when the voltage across it remains well below its "clamping voltage", thus varistors are typically used for suppressing line voltage surges. However, a varistor may not be able to successfully limit a very large surge from an event like a lightning strike where the energy involved is many orders of magnitude greater than it can handle. Follow-through current resulting from a strike may generate excessive current that completely destroys the varistor.

Note: It does not take a "lightning strike", just high current at the clamping voltage that would damage or destroy it. Once damaged the surge protection that ever existed via that part is gone, although the plugs may still operate.

Posting pictures of the surge protector would be helpful.

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Black implies a catastrophic (unacceptable) failure. No properly sized protector must suffer catastrophic damage. Assuming 'black' is an MOV vaporizing, then only its case averted a house fire.

Any protector (ie MOV) that fails on a surge was grossly undersized and ineffective protection. In your case, a surge too tiny to damage the attached appliance also destroyed the undersized protector. Undersizing gets naive consumers to recommend it and buy more.

Protectors have a thermal fuse to disconnect protector parts (ie MOVs) as fast as possible while leaving that surge still connected to appliances. Apparently your thermal fuse did not disconnect that MOV fast enough. And the surge was too tiny to overwhelm more robust protection inside the appliance. APC recently announced some APC protectors that must be removed immediately due to this same failure.

MOV should have been disconnected BEFORE it could vaporize. Your thermal fuse apparently failed to do that; createing a potential house fire. Others have seen same. For example, a NC fire marshal reports on what they found in their fire house.

Recent fires involving multiple outlet devices toted as surge suppressors raised attention at the Gaston County Fire Marshal's office primarily when one such fire occurred in a fire station. Investigation of a fire that started behind a desk in an office revealed the ignition source was a surge suppressor.

... In the office area they discovered a small fire burning behind the desk. ...

Within that firehouse, three separate surge suppressors were recovered and examined. Each had failed, the one caught on fire, another suppressor ceased working, while the third continued working but later was found to have failed internally. These findings, coupled with suspicion of suppressor involvement in other fires, prompted in-depth examination of possible reasons. ...

Alternatively, fire investigators m[a]y correctly determine the suppressor was involved in ignition but improperly categorize the cause as overloading or other related failure initiated by the user.

Some numbers. Destructive surges can be hundreds of thousands of joules. How many joules does that near zero protector claim to absorb? Hundreds? Those specification numbers say the protector is only for a near zero type of surge that typically does not cause damage.

That protector and all household appliances need protection only provided by properly earthing one 'whole house' protector. This superior solution typically costs about $1 per protected appliance. How much did you pay for that power strip? Learn from that catastrophic (unacceptable) failure.

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