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Loss of power on a grid is quite serious in that you could end up in a "black start" situation whereby most coal fired power stations can not start up by themselves. They need a large (at least 30MW) machine nearby (hydro, GT etc). Australia has some of the best regulations for grid connection and compliance and there is a lot of mathematics behind it - believe me.
The actual cause is induced EMF on the transmission line which can have a large DC component (or VLF - ie < 1Hz) and this finds its way to a transformer which then saturates the core of the transformer. This results in overfluxing and rapid increases in iron core temperature. All transformers work on AC and hence the cycling of the AC voltage prevents core saturation. It is a characteristic of iron.
The phenomenon is real and taken very seriously by transmission authorities. Transformers take many months to build and then transport and installed. If one has overflux protection it may catch it although it is not necessarily designed for this type of influence.
Darrin...
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