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This paper presents a method for calculating zone-2 setting of distance relays without causing coordination problems. The proposed method is based on the impedance seen by distance relays when faults are simulated on the reach of zone-1 of primary relays for the maximum and minimum generation outputs of the power system. It is shown that the proposed method increases the reach of zone-2 relays without causing coordination problems. The proposed method is modified for use in an adaptive protection system. It is shown that further improvements can be achieved when settings are calculated using the proposed method and the prevailing system conditions. Measures to alleviate the impact of communication failure are discussed. The proposed method and its adaptive version were applied to an existing power system and some results are reported in the paper.