Increasing electrical energy consumption and associated power grid expansion tend to increase the level of the fault currents in power systems. Maintaining proper functioning of the grid requires fault currents to be at an acceptable level using appropriate fault current limiting techniques. Most of the fault current limiter devices work in a saturated core region during normal operation mode. Since the continuous saturation core also requires continuous energy supply, the use of the cores that operate at low initial permeability region is a suitable candidate with no power consumption. For this purpose, the potential use of the SAE 1020 low carbon steel in the fault current limiter is investigated. The design simulation is carried out in terms of required shape, dimensions and parameters by using finite element analysis. The dimension of the fault current limiter is optimised by introducing air gaps into the core, while keeping the performance of the fault current limiter device unchanged. The simulation results indicate that the proposed design with air gaps still has a better current limiting performance compared to the coil with pure air core. Reducing the dimensions of the device is achievable in the expense of its performance.