What is the difference between oil type and dry type transformers in power systems?

Oil type transformers use liquid insulation and cooling, enabling compact high voltage, high MVA designs with efficient heat transfer, but they require spill containment and fire risk mitigation. Dry type transformers use air and solid insulation (often cast resin), making them preferred indoors or where environmental constraints prohibit oil. Dry types typically have lower spill and fire hazards but may be larger or more expensive at high ratings. Grid selection depends on location, rating, safety rules, and lifecycle costs.