Why Is Oil Used in Power Transformers? Key Benefits Explained

Most power transformers are oil-immersed, as the use of oil as both a cooling and insulating medium has proven highly effective in the electrical industry. Below are the primary reasons for using oil in power transformers:

Cooling: Oil possesses excellent cooling properties. It absorbs heat generated during transformer operation—particularly from the windings and core due to electrical losses—and transfers it away, effectively dissipating thermal energy and preventing overheating.

Insulation: Oil provides reliable electrical insulation, minimizing the risk of electrical breakdown and arcing between high-voltage and low-voltage windings. With its high dielectric strength, insulating oil can withstand significant electric field stresses without failure.

Dielectric Properties: The superior dielectric characteristics of oil make it an ideal insulating medium. It resists electrical conduction under high voltage, helping to prevent short circuits and ensuring stable, reliable transformer operation.

Chemical Stability: Transformer oil is chemically stable and resistant to degradation over time. This stability is essential for preserving its insulating capabilities and supporting the long-term reliability of the transformer.

Arc Quenching: In the event of an internal fault or arcing, oil acts as an effective arc-quenching medium. It helps extinguish the arc by cooling and deionizing the plasma, thereby limiting damage to internal components.

Ease of Maintenance: Oil-immersed transformers are relatively easy to maintain. The condition of the oil can be routinely tested for dielectric strength and other key properties. If needed, the oil can be filtered, reconditioned, or replaced to restore optimal performance.

Cost-Effectiveness: Compared to alternative cooling and insulation methods—such as air in dry-type transformers or gases like SF₆—transformer oil offers a favorable balance of performance, efficiency, and cost, making it economically advantageous for widespread use.

While oil-immersed transformers are known for their reliability and efficiency, ongoing research continues to explore alternative insulation and cooling technologies, such as dry-type transformers that use solid insulation materials. These alternatives are often preferred in applications where environmental safety, fire risk, or oil leakage are significant concerns.