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Nitrogen in Transformers

Oil filled Transformers usually have a conservator which maintains the level of oil.  The conservator has a layer of air on top of the oil.  This air communicates with the atmosphere through a breather containing a desiccant,usually, silica gel. 

In some transformers, the tank of the transformer is filled with a layer of nitrogen above the oil in which the windings and the core are immersed.  Nitrogen, being an inert gas, reduces the risk of a fire hazard.  It also protects the transformer oil and the transformer insulation from reacting with oxygen in the air and deteriorating. 

In transformers containing nitrogen, the nitrogen is led into the space above the conservator through a pressure reducing valve.  When the oil level in the transformer rises and the transformer breathes out, the nitrogen inside is released into the atmosphere.  When the oil levels fall due to a reduction in ambient temperature or the load, fresh nitrogen is released into the conservator through the cylinder and the valves.