Dry-Type or Oil-Immersed Transformer? A Comparative Selection Guide

In short, a dry-type transformer is generally the right choice indoors and wherever fire risk is critical, such as shopping malls, hospitals, data centers, high-rise buildings and other enclosed spaces, while an oil-immersed transformer is generally the right choice outdoors and for industrial and utility applications that demand high power, where initial cost carries the most weight and efficiency and loss performance are critical.

The fundamental distinction is the cooling medium. In an oil-immersed transformer, the windings are insulated and cooled in mineral oil or ester fluid; in a dry-type transformer, insulation and cooling are provided by air, and the windings are either cast in epoxy resin (cast resin) or produced as open windings (VPI). This single difference drives fire safety, maintenance, efficiency and installation conditions alike.

The right choice depends not on a single criterion but on the installation location, power and voltage level, environmental conditions, fire regulations and total cost of ownership considered together. In the sections below, we look at each of these through engineering criteria.

Both types work on the same electromagnetic principle, transferring energy from one winding to another at a different voltage level; what differs is the medium in which the windings are insulated and cooled. In an oil-immersed transformer, the core and windings are submerged in mineral oil inside a tank, and the oil acts both as an insulator and as a coolant that carries heat to the surface. A conservator or a hermetically sealed tank accommodates oil expansion, and protective devices such as the Buchholz relay are used.

Dry-type transformers are built in two main groups. In cast resin transformers, the windings are embedded in epoxy resin under vacuum, which gives high resistance to moisture, pollution and mechanical impact. In the VPI (vacuum pressure impregnation) type, the windings are impregnated with resin but keep an open-winding structure; this type is mostly preferred indoors and in lower voltage and power ranges.

This structural difference also changes the protection philosophy. Oil-immersed transformers rely on oil testing, dissolved gas analysis and Buchholz protection, whereas dry-type transformers use PT100/PTC sensors that monitor winding temperature, together with fan control units. Whichever type you choose, designing protection relay coordination as an integral part of the transformer substation is decisive for safe and continuous power.

Fire safety is the most decisive criterion between the two, and dry-type transformers have the clear edge: they contain no flammable liquid, are self-extinguishing and release very little toxic gas in a fire. They are therefore preferred in enclosed, high-occupancy spaces such as hospitals, shopping malls, airports, metro systems, high-rise buildings and data centers, and in most cases they can be placed close to the load center without a separate transformer building.

In oil-immersed transformers the oil is flammable, so additional measures such as an oil containment pit, fire walls and the required separation distances are standard practice. Indoor use requires a separate transformer room that complies with fire regulations and infrastructure that keeps oil leaks under control. Outdoors, these measures are easier to provide, which is why oil-immersed units are the common solution there.

Fire behavior class matters in selection. Dry-type transformers are classified by fire behavior (for example, fire class F1) and specified together with their environmental and climatic classes under IEC 60076-11. On the liquid-filled side, high-fire-point ester fluids can be used instead of conventional mineral oil to reduce fire risk in enclosed spaces.

Oil-immersed transformers generally have lower no-load (core) losses at the same rating and better cooling capability, which gives them an efficiency advantage at high ratings and under continuous full load. The high heat capacity of oil also gives them relatively high tolerance to short-term overloads. That is why high-power units in large industrial plants and distribution networks are predominantly oil-immersed.

Because dry-type transformers are air-cooled, they can be bulkier at the same rating, and temperature rise can become the limiting factor under natural air cooling (AN); with forced air cooling (AF), however, short-term load increases can be handled. In modern cast resin designs, loss levels can be optimized against the investment model, and low-loss core materials close much of the efficiency gap.

Environmental resilience also changes the picture. Housed in an IP-rated enclosure, dry-type transformers perform very well indoors in humid, dusty and aggressive environments, and with no risk of oil leaks they carry an environmental advantage. Oil-immersed units stand out for strong cooling over a wide temperature range and on outdoor sites. From an environmental management perspective, oil disposal and leak-tightness need to be planned within an ISO 14001 framework.

Maintenance needs differ between the two types. Oil-immersed transformers require periodic oil sampling, insulation testing and dissolved gas analysis (DGA), gasket and seal inspections and, when necessary, oil filtration or replacement. For dry-type transformers, basic maintenance consists of cleaning dust from the windings and cooling ducts and checking connection torques and the temperature monitoring system. In this respect, dry-type units have a comparatively simpler maintenance profile.

In initial capital cost, an oil-immersed transformer is generally more economical than a dry-type unit of the same rating. In total cost of ownership (TCO), however, the picture is shaped by the cost of losses, maintenance expenses, fire safety infrastructure and space costs combined. A dry-type solution that can sit close to the load center without a separate transformer building can close the gap through savings in cabling and infrastructure.

A sound comparison looks beyond the price tag to the annual cost of losses under the expected load profile, maintenance intervals and lifetime expenses. Evaluating transformer substation installation cost as a whole is also a precondition for choosing the right type.

Choose dry-type for indoor and fire-sensitive installations, and oil-immersed for outdoor, high-power and cost-driven ones. Prioritize a dry-type transformer when the unit must be installed indoors or close to the load center; when the site is a hospital, shopping mall, hotel, data center, high-rise building or another space where fire safety is critical; when oil leaks and environmental risk are unacceptable; or when you want to keep maintenance simple and avoid the cost of a separate transformer building.

Prioritize an oil-immersed transformer when installation outdoors or in a separate transformer room is possible; when high power and continuous full load are involved; when initial capital cost is decisive; or when strong cooling and overload tolerance over a wide temperature range are required. In most of these cases, oil-immersed is the more efficient and economical option.

In practice, the decision becomes clear when voltage level (including MV up to 35 kV), installed capacity, installation location, fire regulations, environmental conditions and budget are evaluated together. Correct installation, MV switchgear integration, protection relay coordination and commissioning determine operational safety just as much as correct selection. With 120 MVA of total transformer capacity delivered, Miratek takes on the design, installation, protection coordination and periodic maintenance of dry-type and oil-immersed transformer substations end to end across Türkiye, and determines the right type for your application using measurable criteria.