Transformers are an indispensable part of the power system. Due to the expansion of urban areas, large transformers are more often located in residential areas or their vicinity. This paper will explain the operation of power transformers and their position in the power grid and their impact on the environment and populated areas, potential dangers to the environment, as well as to people living near transformer stations, the impact of liquid dielectrics, ie oils that are found in large quantities in transformers. This paper will point out potential solutions that are trying to adapt to modern challenges in the production of transformers. One of the conditions that transformers in populated areas will have to meet in the future is the replacement of mineral oils with biodegradable and more heat-resistant insulating fluids. Insulating fluids that are more often used are synthetic and natural esters. Ether-filled transformer poses a much lower danger to the environment than a classic transformer which is filled with mineral oil because esters have a much higher flash point and are biodegradable. The data collected in this paper were obtained from professional articles and directly from the transformer manufacturers themselves. By collecting the available data in this paper, an attempt will be made to explain the justification for the production of transformers with biodegradable insulating fluids. Improvements in the performance of transformers will also be pointed out, by collecting and sending data, as well as the growing role that transformers should play in the entire power system in the near future. Long term cost effectiveness from usage of ester filled power transformers will be described with this paper as well as its usage advantages in densely populated and environmental sensitive areas.