Overall, capacitors have many applications in power systems: they can be used in series to compensate the inductance of transmission lines to transmit more power. They can also be used as surge capacitors, starting motors, and SVC. Capacitor banks installed in power substations are vital in the sense that they provide the reactive power needed for the power system, which in turn improves the voltage profile of the system. There is always the option of grounding the banks or leaving them ungrounded. Each of the above configurations has its own advantages and disadvantages; to name a few, ungrounded banks are slightly more expensive compared to grounded banks as the neutral point needs to be insulated up to system basic insulation level; whilst grounded banks are prone to inject high-frequency transients into the ground mat. This study is intended to address the recent incident in a high- voltage substation which led to the explosion of a capacitor bank. The study goes on to suggest grounding as a method to prevent such incidents. Furthermore, the effects of grounding and induction on control/signal cables as well as protecting relays are investigated.