Which is better: oil-immersed or dry-type transformers?

Core Technology & Cooling

Oil-Immersed Transformers: These utilize highly refined mineral or sometimes biodegradable oil as both an insulating medium and a coolant. Windings and core are submerged in the oil tank. Heat generated by losses is transferred to the oil, which circulates (often aided by fins, radiators, or pumps) and dissipates heat to the surrounding air.
Dry-Type Transformers: These use solid insulation materials (epoxy resin, vacuum pressure impregnated (VPI) varnish, cast resin) for winding insulation and rely solely on ambient air for cooling. Cooling is achieved through natural convection or forced air (fans).
Key Comparison Factors

Safety & Fire Risk:

Dry-Type: A primary advantage. With no flammable liquid, fire risk is significantly lower. They produce minimal smoke if overheated. This makes them the mandatory choice for installations indoors near occupied spaces, fire-sensitive areas (hospitals, schools, high-rises, tunnels, mines), or where fire codes strictly limit combustible materials.
Oil-Immersed: Contain large quantities of combustible oil. While modern designs include pressure relief devices, fire-resistant fluids exist, and severe faults are rare, the inherent fire hazard necessitates containment systems (dykes) for indoor use and restricts placement in critical safety areas. Outdoor installations mitigate this risk significantly.
Environmental Considerations & Location:
Which is better oil immersed or dry type transformer?

Dry-Type: Ideal for indoor installation due to zero risk of oil leaks contaminating floors or groundwater. They tolerate dusty or mildly polluted environments well, depending on their IP (Ingress Protection) rating (e.g., IP20 for clean indoor, IP54 for dust/damp). Can be installed directly in the load center. Sensitive to excessive moisture unless specially encapsulated.
Oil-Immersed: Primarily designed for outdoor installation (pad-mounted, substations) where oil containment is simpler and fire risk is lower. Indoor use requires fire-rated vaults with containment systems, increasing cost and space requirements. Risk of soil/water contamination exists if leaks occur (mitigated by using less toxic fluids). Generally more robust against temporary moisture ingress.
Maintenance Requirements:

Oil-Immersed: Require regular monitoring and maintenance of the oil (sampling, testing for dielectric strength, moisture, dissolved gases) and the cooling system. Potential need for oil filtration/replacement over its very long lifespan. Leak inspections are crucial.
Dry-Type: Generally require less intensive maintenance. Primary focus is on keeping cooling vents clean and ensuring adequate ventilation. No oil testing or handling is needed. Visual inspections and periodic checks of connections/enclosures suffice in most environments.
Efficiency, Losses & Cost:

Efficiency: Both types can achieve comparable high efficiency levels (e.g., meeting DOE 2016 or similar standards), especially at medium to large power ratings. Historically, oil transformers had a slight edge at very high power (> 10 MVA), but modern high-efficiency dry-types have largely closed this gap for typical distribution ratings. Specific efficiency should be compared model-to-model.
Initial Cost: Dry-type transformers generally have a higher initial purchase cost per kVA compared to equivalent oil-immersed units, primarily due to the cost of specialized solid insulation and the need for more copper/iron to manage heat dissipation without oil.
Lifetime Cost: The picture reverses when considering installation and lifecycle costs. Dry-types eliminate vault costs (for indoor use) and reduce ongoing maintenance expenses. Oil-types have lower upfront cost but incur costs for containment (if indoor), potentially higher maintenance, and environmental compliance. The total cost of ownership (TCO) must be evaluated per application.
Load Capability & Overload:

Oil-Immersed: Oil has a high thermal capacity, allowing these transformers to handle substantial temporary overloads (typically 150-200% for short periods) more effectively. Ideal for applications with high inrush currents or fluctuating loads.
Dry-Type: Thermal mass is lower. Overload capability is more limited (typically 120-150% for short periods, highly dependent on design/insulation class). Proper ventilation is critical to avoid overheating during overloads. Forced air cooling (fans) can significantly boost short-term capacity.
Size, Weight & Noise:

Oil-Immersed: Often more compact per kVA rating compared to dry-types due to superior heat transfer via oil. Heavier due to the oil and robust tank construction.
Dry-Type: Typically larger and physically bulkier per kVA due to reliance on air cooling. Generally lighter than oil-filled units of similar rating (no oil weight). Noise levels can be comparable or slightly higher depending on design and cooling fans.
Life Expectancy:

Both types are designed for long service lives, typically exceeding 25-30 years when properly applied and maintained. Oil-immersed transformers, with diligent oil maintenance, can often exceed 40+ years in service. Dry-type lifespan is heavily influenced by operating temperature and environmental conditions (moisture, contaminants).
Conclusion: The Right Tool for the Specific Job

There is no universally "better" transformer. The optimal choice depends entirely on the application's constraints and priorities:

Choose Dry-Type Transformers When:
Safety is paramount (indoor, occupied areas, fire-sensitive locations).
Oil leaks are unacceptable (water table concerns, clean rooms).
Indoor installation without a vault is desired/required.
Lower maintenance overhead is a significant factor.
Space allows for their larger footprint.
Choose Oil-Immersed Transformers When:
Outdoor installation is feasible (substations, pole/pad mounts).
Highest possible overload capacity is needed.
Lowest initial purchase cost is a primary driver (especially for large ratings).
Space constraints favor a smaller footprint per kVA.
Harsh environmental conditions (excluding fire risk) are present (robustness).