Significance of removing acidity in transformer oil

Though all oils are good insulators, vegetable oils and animal fats are not used in transformers since the fatty acids attack fibrous elements used in winding insulation.

When transformer oil comes in contact with atmospheric oxygen it goes through chemical reaction which results in sludge or acid formation and settles in windings of the transformer. The oil deterioration that occurs deprives the insulating liquid of its cooling attributes and leads to expensive repairs.