As the level of moisture content increases in a transformer, it has two major effects. Firstly, the additional water interacts with the paper in the insulation causing accelerated damage. This damage weakens the mechanical strength of the paper, allowing cracks to form and breakdowns to occur. Secondly, the additional water interferes with the insulation performance of the oil-impregnated paper. Under certain circumstances, this can result in insulation breakdown and catastrophic damage. Therefore, a high value of moisture in the transformer oil indicates an unsafe operating state. Such transformers must be managed very carefully and typically cannot be used to their original design limits safely.
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