Data Center Transformers: Dry Type vs Liquid

Most data center campuses use both. Liquid-filled transformers handle the outdoor work: substation transformers at the utility interface and pad mounts feeding each building or data hall. Dry type transformers handle the indoor work: unit substations in electrical rooms and PDU transformers near the white space. Liquid-filled units are smaller, quieter and more efficient per kVA. Dry type units need no oil containment or vault indoors. Less-flammable fluids such as natural ester narrow the gap.

Where each data center transformer sits on the campus

On a campus, which type you use comes down to location. At the top of the system, liquid-filled power transformers step transmission or subtransmission voltage down to a medium voltage distribution bus in the campus substation. From there, medium voltage feeders run to each building, and liquid-filled pad mount transformers outdoors commonly step down to the low voltage switchboards serving UPS systems and mechanical loads.

Inside the building, the picture flips to dry type transformers. Consulting-Specifying Engineer notes that dry type transformers are the most commonly used type indoors because their location is far less restricted. Typical indoor roles include medium voltage unit substations in electrical rooms, where the transformer is close-coupled to primary and secondary switchgear, and low voltage PDU transformers on the data hall floor.

Many designs push medium voltage deeper into the building to cut low voltage cable runs, which puts more dry type medium voltage transformers indoors. The choice between cast resin and VPI for those indoor units is its own decision, covered in our cast resin vs VPI transformer guide. This article stays with the larger question of dry type vs liquid filled.

Fire and siting: NEC 450, FM Global and less-flammable fluids

Fire rules are the main reason oil stays outdoors. Under NEC 450.26, oil-insulated transformers installed indoors must be in a vault, with limited exceptions, according to EC&M's summary of Article 450. Outdoors, NEC 450.27 requires safeguards such as fire-resistant barriers or separation so a transformer fire cannot spread to buildings, fire escapes or door openings.

Dry type units get lighter treatment. NEC 450.21 requires units over 112.5 kVA to be in a transformer room with at least a 1-hour fire rating. Dry type transformers over 35,000 V installed indoors still need a vault.

Less-flammable liquids sit in between. NEC 450.23 lets less-flammable liquid-insulated transformers go indoors under defined conditions; for units rated 35,000 V or less, one option is an automatic fire extinguishing system combined with a liquid confinement area. Cargill states that its FR3 natural ester has a 360°C fire point against 165°C for mineral oil, and classifies it as K-class and less-flammable.

Insurers often matter as much as the code. FM Global Data Sheet 5-4 recommends dry type or gas-insulated transformers indoors where suitable. Its separation tables allow much shorter clearances for FM Approved fluids than for mineral oil: for example, 3 ft to a building for an FM Approved fluid versus 25–100 ft for large mineral oil units, depending on wall construction. Check the owner's insurer early.

Efficiency and DOE standards for data center transformers

Liquid-filled units usually have the efficiency edge, and federal minimums reflect it. The Department of Energy sets minimum efficiencies in 10 CFR 431.196 for liquid-immersed, low-voltage dry type and medium-voltage dry type distribution transformers, measured at 50% of nameplate load. The current levels took effect January 1, 2016. Amended standards published in April 2024 are required on and after April 23, 2029.

The tables show the gap. At 1,500 kVA, the 2016 minimum is 99.48% for three-phase liquid-immersed and 99.37% for medium-voltage dry type (20–45 kV BIL). At 2,500 kVA the figures are 99.53% and 99.47%. The 2029 levels raise both.

Fractions of a percent add up at near constant load. Eaton's application presentation on liquid-filled transformers lists lower losses as a liquid-filled advantage and models the operating cost difference over 20 years. Ask for guaranteed no-load and load losses on every quote.

Footprint, noise and maintenance

Liquid-filled transformers are smaller for the same rating. Consulting-Specifying Engineer explains that dry type units rely on air to cool the core and windings, so they are typically larger. Schneider Electric describes oil-filled as the smallest in dimension and the most widely used outdoors, and Eaton's presentation lists lower sound levels as a liquid-filled advantage. Indoors, though, the extra floor area of a dry type unit is often easier to accept than a vault and oil containment.

Maintenance also differs. Liquid-filled units need periodic fluid sampling and testing. Dry type units need clean, dry air and periodic inspection and cleaning of the windings and vents, a burden that cast resin reduces. Schneider Electric gives oil-filled units a 25–30 year life, longer than the figures it gives for dry designs.

Harmonics, K-factor, loading and sizing

Size a data center transformer for its real load profile, not just the IT nameplate. Server power supplies, UPS rectifiers and drives are nonlinear loads. Maddox explains that harmonic currents raise winding and core losses and can overheat neutrals through triplen harmonics. K-factor transformers do not filter harmonics; they are built to withstand them. The same source notes K-4 is sufficient for most harmonic profiles, with K-13 and K-20 for heavier content.

Harmonics are usually handled differently by type. Dry type PDU and low voltage transformers are commonly specified with a K-factor rating. Maddox notes derating is more common with liquid-filled units, which it describes as better suited to harmonic distortion than dry types.

Loading headroom matters for redundancy. In 2N or N+1 schemes, a transformer may run near half load normally and carry the full load after a failure. Consulting-Specifying Engineer notes liquid-filled units can sustain short overloads up to 50% above nameplate, and Cargill says natural ester can carry up to 20% more load than mineral oil in emergencies. For dry type units, specify temperature rise (80°C, 115°C or 150°C) and forced-air ratings deliberately, because a lower rise leaves more overload margin.

Decision table: dry type vs liquid filled transformer

Factor	Liquid-filled (pad mount or substation)	Dry type (cast resin or VPI)
Typical campus location	Outdoor substation and building service pad mounts	Indoor unit substations, electrical rooms, PDUs
Indoor code path	Vault for mineral oil (NEC 450.26); less-flammable fluid options under 450.23	1-hour room over 112.5 kVA (450.21); vault only above 35 kV
Fire and insurer	Needs separation or barriers; FM Approved fluid shortens distances	FM Global prefers dry type indoors where suitable
Efficiency	Higher DOE minimums at the same kVA	Slightly lower DOE minimums
Footprint and weight	Smaller for the rating	Larger; air cooled
Sound	Lower	Higher; plan room acoustics
Overload	Short overloads up to 50% above nameplate	Depends on temperature rise and fans
Harmonics	Often derated	Often K-factor rated
Maintenance	Fluid sampling and testing	Clean air, periodic inspection
Oil containment	Needed	Not needed

Use liquid-filled wherever the unit can sit outdoors, and dry type wherever it must sit inside. Consider less-flammable fluid where a liquid unit must be close to the building, and cast resin where a dry unit faces moisture, dust or a primary above 25 kV.

How Ryan Sales helps

Ryan Sales represents JST Power Equipment in Texas and Oklahoma and supports data center projects nationwide. We can help you apply the JST Three-Phase Liquid-Filled Pad Mounted Transformer (75–5,000 kVA, up to 34.5 kV, built in Wytheville, Virginia), JST power transformers with mineral oil, natural ester or synthetic coolant, and dry type transformers from cast resin to LV PDU units. See our data center industry page, the full pad mount transformer range, and power transformers and packaged substations.

FAQ

What type of transformer is used in data centers?

Most data centers use both types. Liquid-filled power and pad mount transformers sit outdoors in the campus substation and at each building's service. Dry type transformers, usually cast resin or VPI, sit indoors in unit substations and as PDU transformers near the IT load. The split follows fire code: oil indoors generally needs a vault under NEC 450.26, while dry type units do not below 35 kV.

Can a liquid-filled transformer be installed inside a data center?

Yes, but the path is narrow. Mineral oil units indoors generally require a vault under NEC 450.26. Transformers filled with a less-flammable liquid, such as natural ester, can be installed indoors under NEC 450.23 when conditions are met, such as automatic fire suppression with liquid confinement for units at 35 kV or below. Confirm the approach with the authority having jurisdiction and the owner's insurer.

Are liquid-filled transformers more efficient than dry type?

Generally, yes. DOE minimum efficiencies in 10 CFR 431.196 are higher for liquid-immersed units than for medium-voltage dry type units of the same rating. At 1,500 kVA, the 2016 minimums are 99.48% and 99.37%. Amended standards required from April 23, 2029 raise both. Compare guaranteed losses at your actual loading, since data centers run near constant load.

Do data center transformers need a K-factor rating?

Often, for low voltage units serving IT loads. Server power supplies and UPS rectifiers draw harmonic currents that add heat in windings and cores. A K-factor rated dry type transformer, commonly K-4 to K-13, is built to withstand that heat. Liquid-filled units are more often derated instead. Base the choice on the UPS input harmonic spectrum, not a rule of thumb.

Talk to a rep

Planning a campus or a new data hall? Send us your one-line, voltages and site layout, and a Ryan Sales rep will help you decide where liquid-filled and dry type units fit. Read more in our medium voltage equipment for data centers guide and our medium voltage equipment lead times overview, call (281) 363-1106, or request a quote.

Data Center Transformers: Dry Type vs Liquid-Filled