Current transformers (CTs) are sensors that measure alternating current (AC). They are particularly useful for measuring electricity consumption. Like any other transformer, an installed current transformer has a primary winding, a magnetic core, and a secondary winding.

In the case of whole building monitoring, the primary winding is the live wire coming into the building, that is passed through the opening in the CT. The secondary winding is made of many turns of fine wire housed within the clamp. The alternating current flowing in the primary produces a magnetic field in the core, which induces a lower current in the secondary winding circuit for monitoring purposes..

Their basic operation is like that of a transformer. It works with one primary turn, or winding, which in nearly all cases is the conductor being measured. The coils around the clamp serve as a secondary winding of the current transformer.

Current flowing through the conductor generates an alternating magnetic field that rotates around it. This field is concentrated by the clamp’s iron core, inducing a flow of current in the secondary windings in the meter. The measure of the amount of magnetic field passing through the conductor (or any surface) is called magnetic flux, denoted by the Greek letter phi, Φm.

The signal is proportional to the ratio of the turns. A much smaller current is delivered to the meter's input due to the ratio of the number of secondary windings (those wrapped around the jaws of the clamp) vs. the number of primary windings wrapped around the core.

If, for example, the secondary has 1000 windings, then the secondary current is 1/1000 the current flowing in the primary. Thus 1 amp of current in the conductor being measured would produce 0.001 amps, or 1 milliamp, of current at the input of the meter. With this technique, much larger currents can be easily measured by increasing the number of turns in the secondary.