What does dielectric dissipation factor indicate in transformer oil?

Dielectric dissipation factor, often expressed as tan delta or power factor for oil, indicates how much electrical energy is lost as heat within the insulating liquid under an AC field. Higher values typically mean more contamination, moisture, oxidation byproducts, or aging, which reduce insulation quality and increase heating. It is sensitive to polar contaminants and can reveal deterioration even when BDV still looks acceptable. Trending tan delta over time helps detect gradual oil degradation and supports decisions on filtration, regeneration, or replacement.