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A hydraulic circuit is any system that has a liquid flowing in a complete circle through separate and discrete parts. In order to be a true circuit, the fluid needs to flow through multiple components. When the fluid is contained within a single component, it is a hydraulic system, but not a hydraulic circuit. There are three main reasons to use a hydraulic circuit: generating power, cooling hot systems and providing pressure for hydraulic machinery.
The most common place to find a hydraulic circuit is in a large machine or industrial complex. It is only in locations like these where there is enough room to house all the constituent parts for the circuit. Since hydraulic circuits need to be made of separate pieces, they often require much more space than other hydraulic systems. While some circuit systems are quite small, these are much less common.
Generally, hydraulic circuits are made in a similar manner regardless of the purpose for which they are used. Most hydraulic systems have a pump and piping to move the liquid. Next, they have a work component, the item the liquid is actually being used for. This may be a wide range of things, but it is always present. If the fluid changes form, from a liquid to a gas, for instance, the system will have a reclamation tank to bring the material back to its liquid state.
Using a hydraulic circuit for power generation is very common, as many modern power plants work by heating water. Water is heated, which makes it expand and flow, sometimes turning it into steam. The flowing water or steam moves past a turbine and makes it turn, generating power. The water moves to a holding system, where it cools so it may be used again. Steam moves to a reclamation chamber, and as it cools, it turns back into water.
When liquid is used for cooling equipment, it generally doesn’t actually interact with the thing it's cooling. In this case, instead of being in line with the work item, it is right next to it. Cool liquid is pumped past hot machinery, pulling the heat out along with it. The hot liquid continues on past the component, where it is allowed to cool for reuse.
The last common use for a hydraulic circuit is in general hydraulic systems. Since liquid flows easily, but doesn’t compress very much, it is well-suited to help systems create periodic pressure. The liquid flows into the system, where it is trapped by airtight seals. The hydraulic system uses the additional pressure, and the liquid is allowed to flow out. This is similar, but separate, from a typical hydraulic system, where the fluid is always within the component.