What is Arc formation?

When a short circuit occurs, a heavy current flows through the contacts of the circuit breaker and they are opened by the protective system. At the instant when the contacts begin to separate, the contact area decreases rapidly and large fault current causes increased current density and hence rise in temperature.

The heat produced in the medium between the contacts is sufficient to ionise the medium. The ionised air or vapour acts as a conductor and an arc is struck between the contacts.