Size 3/0 AWG wire is the correct guage to use for 200 ampere service,
not 2/0 AWG.
In any circumstance the wire diameter needs to be sized to the
breaker protecting it.
In a dead short situation you will want the breaker opening, even if
it is rated at 125 to 150 percent tripping, well before the wire
heats up to the point where the insulation melts and possibly catches
fire or releases poisonous gases.
The only point where the a.c. electrical ground is bonded to the
neutral should be in the main distribution panel and not in any sub
panel or appliance.
In commercial 200 amp single-phase, three wire installations the size
of the a.c.e.g. is 2AWG while the current-carrying conductors are 3/0
AWG. This is because the a.c.e.g. is a fault drain and not a current-
carrying conductor, but in D.C., everything changes, and that is a
topic for a separate discussion.
Lastly, in amateur appliances such as medium power transmitting
equipment, the connection to the frame of the equipment, e.g., the
frame ground or RF static drain, should be of the heaviest guage
affordable, and this conductor needs to be bonded to all the other
a.c.e.g and static grounds, ground rods, external ground ring,
interior halo, etc.
Hal Mandel
W4HBM