Why is a transformer oil power factor test performed?

The oil power factor test is performed to quantify dielectric losses and detect early insulation deterioration that may not yet trigger alarms. It helps identify moisture ingress, oxidation products, and contamination that can reduce dielectric withstand and increase heating inside the insulation system. Many maintenance programs trend oil power factor over time and compare it with limits in utility guides, because a rising trend often correlates with accelerated paper aging and higher risk of partial discharge or internal faults. It is also a common acceptance test after oil processing, repairs, or major overhauls.