Oil is provided in an oil-filled transformer for

A. Lubrication
B. Insulation
C. cooling
D. both cooling and insulation

Answer: D. both cooling and insulation

Explanation:
Functions of Transformer Oil
Oil is an equally important part of a transformer’s overall insulation.
(1) Electrical Insulation:- 
The main function of insulating oil in a transformer is to provide electrical insulation between the various energized parts; it also acts as a protective coating layer to prevent oxidation of the metal surfaces.

(2) Heat Dissipation/Coolant:- 
Another important function of the oil is to enhance heat dissipation. Transformer cores and windings get heated up during operation due to various power losses. 

Oil takes heat away from the core and windings by the process of conduction and carries heat to the surrounding tank, which is then radiated out to the atmosphere. 

In order that the mineral oil can dissipate the heat away effectively, certain specifications — including viscosity, pour point, and flash point — need to be maintained.

(3) Diagnostic Purposes:- 
The third (very useful) function of insulating oil in a transformer is that it acts as a health indicator for the device. 

Both the chemical and electrical conditions of the transformer can be monitored by examining the oil periodically. 

Oil samples are collected from designated sampling points of the tank and taken to laboratories for several tests to be performed.

When a fault develops within the transformer, the energy is dissipated through the oil, which causes chemical degradation of the liquid. 

Testing oil samples for degradation products can provide useful information about the nature and severity of possible faults inside a transformer.
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