Abstract: Because of the magnetic hysteresis effect, there will be remanence in the iron core after the de-energization of the transformer. When the transformer is re-energized, if the closing angle is not appropriate, the remanence will make the iron core reach the saturation state and will cause inrush current. The inrush current will cause the action of relay protection devices and fail the re-energization. Besides, the non-sinusoidal inrush current may cause power system resonance and thus lose the stability. In order to eliminate the remanence, an oscillating attenuated current can be applied in the winding, but this requires a set of demagnetization power source and complicated operations, which are rarely used in practice. Therefore, the ideal situation is that the transformer directly has no or little remanence after the de-energization, and additional demagnetizing methods are not necessary. A method to reduce the transformer remanence based on the principle of automatic demagnetization was proposed. The idea is that utilizing the capacitance effect in the external circuit of the transformer, especially the parallel voltage equalizing capacitor of the circuit breaker, makes the current after the de-energization oscillate to a certain extent under the influence of the capacitance and the equivalent inductance of the transformer. The oscillating attenuated current is equivalent to the demagnetization current, and will make the magnetic field in the core decrease to a small value. The simulation results of the remanence variation characteristics with the capacitance in the external circuit were given, and then the value of the parallel voltage equalizing capacitor of the circuit breaker with sufficient core demagnetization effect was given. Besides, the influence of the ground capacitances of the circuit breaker and the transformer on the remanence was also analyzed. Finally, the comprehensive configuration scheme of the capacitors and the application scope of this method were given.