At its core, the energy transition is an electrification story. As countries race to decarbonise transport, heating and industry, electricity is becoming the dominant energy source. Behind every new wind farm, solar park or EV charging hub sits an often overlooked but critical piece of technology: the transformer. Here, Hugo Campelo, senior technical advisor at Nynas AB and CWIEME Berlin advisory board member, explores what electrification means for transformers, right down to their components and oils.

Ember, the energy think tank, estimates that only 22 per cent of EU energy demand is currently electrified and that a further 67 per cent could be electrified with market-ready technologies. Electrification at this scale will require a fundamental expansion and adaptation of grid networks – and transformers are at the centre of this growth. 

Electrification and transformer demand

Electrification fundamentally means more transformers being deployed across both public and private networks. For decades, grid expansion primarily occurred within regulated public infrastructure. Today, growth spans utility-scale renewables, industrial electrification, data centres and urban EV charging hubs – and this landscape continues to evolve. 

Manufacturers’ order books are full for years ahead, and investment in new production facilities is accelerating. Yet scale alone is not the only change. The operating environment of transformers is also shifting. 

Historically, much of the grid operated around relatively stable baseload generation. Renewable integration is now altering that dynamic. Wind and solar introduce variable profiles, increasing thermal cycling and operational volatility across the network. These patterns place new demands not only on transformer design, but on the materials inside them. 

Ultimately, transformers are thermal machines. Heat generated during operation must be dissipated efficiently to maintain reliability and lifespan. The insulating fluid plays a dual role: electrical insulation and cooling. As operating profiles become more dynamic, fluid performance becomes even more critical.

New applications, new requirements 

Renewable deployment is also reshaping where and how transformers operate. Offshore wind installations, for example, impose strict weight constraints. Lower-density materials can reduce overall mass, offering structural and cost advantages. Meanwhile, offshore assets face wide thermal amplitudes and harsh environmental conditions, requiring stability across broader temperature ranges. 

EV charging infrastructure is also expanding rapidly across European cities. According to the International Energy Agency, in 2024 alone, over 1.3 million public charging points were installed globally, a 30 per cent increase compared with the previous year. However, this technology brings its own challenges. Because land comes at a premium, compact substations are key. In such applications, efficient cooling in smaller geometries becomes essential. Meanwhile, lower-viscosity insulating fluids are needed for efficient heat transfer, enabling more compact transformer designs without compromising reliability. 

Across these applications, one thing is clear: The energy transition is not just increasing transformer volumes, it’s redefining performance expectations at the component level.

Supply pressure and shifts in feedstocks

The rapid pace of electrification is putting pressure on transformer supply chains, including insulating liquids. Currently, around 90 per cent of transformer oils are still derived from crude-based feedstocks. However, to meet growing industry needs, the industry will need to diversify its raw material sources. Renewable and alternative feedstocks – including bio-based materials and chemically compatible recycled streams – are becoming increasingly important.

At Nynas AB, our ambition is that by 2035, 30 per cent of sales volume will come from renewable feedstocks. This isn’t just a sustainability objective – it’s a resilience strategy. By developing parallel production pathways beyond traditional crude streams, capacity can expand without relying solely on conventional refining assets.
The importance of circularity

One of the biggest innovations we’re seeing in transformer production is the emergence of true circular models. Each year, significant volumes of transformers are decommissioned, but the insulating oil inside them is often still in good condition. Traditionally, most of this material has either been downcycled or used as fuel – a loss of both value and embedded carbon.

A more sustainable approach involves collecting used transformer oil, carefully separating it from degraded lubricant streams and re-refining it back to high-quality insulating fluid. When managed correctly, these oils can be chemically reset and returned to service with a performance comparable to virgin products.

This circular approach improves supply security, reduces dependence on crude-derived feedstocks and lowers lifecycle emissions. The chemistry is proven. The challenge lies in disciplined implementation, whether it’s the collection and segregation of the oil or the logistics and reprocessing involved. 

Innovation and the future

Over the next decade, innovation in transformer materials will be driven by two converging forces: accelerating electrification and sustainability.

Oil formulations will continue to evolve to accommodate greater volatility, compact designs and harsher environments. But the most significant shift will be the ability to deliver equivalent, or even superior, performance from alternative raw materials, including bio-based and recycled streams. 

Transformers may not dominate conversations around Europe’s energy transition, but they remain foundational to its success. Ensuring that the materials inside them evolve with changing grid requirements is vital for us to build a resilient, scalable and sustainable electric future.

As the industry braces itself for greater electrification, specialist events and platforms will be crucial. For example, CWIEME Berlin brings together leaders from across the Transmission & Distribution (T&D) ecosystem, and this year’s event will include a Transmission & Distribution Club. This is an exclusive lounge dedicated to Transmission System Operators (TSOs), Distribution System Operators (DSOs) and grid equipment manufacturers. It will provide a forum to discuss grid innovation, power transmission and energy distribution. 

Visitors can connect with the T&D ecosystem at CWIEME Berlin 2026 from May 19-21, including companies like TenneT, Siemens Energy, SGB-SMIT, SEW-EURODRIVE and VEM Group GmbH. Register for your ticket now.