The broader impact/commercial potential of this project are: the savings of energy to help US economy; reduction of the pollution and greenhouse gas emissions by lowering energy production of expensive polluting units; improve the reliability of the distribution networks; and avoiding environmental contaminations caused by oil-immersed transformers. This energy-efficient product will save money to taxpayers, since it will have lower operating costs that compensates for acquisition costs. The energy losses attributable to distribution transformer inefficiencies are approximated 60 to 80 billion kWh, which rob U.S. business and American consumers of approximately $4 billion per year. If the changeover to energy-efficient transformers applies nationally (one percent higher efficiency transformers) it will roughly result in savings of about $500 million per year. The technology will upgrade the performance and reliability of the power distribution networks. The costumers are national large power utilities that spend approximately $1.5 billion (annually) to purchase these assets from power transformer manufacturers. While this project focuses on the research and development of the medium voltage transformers for utilities, there are other application areas including, marine and hazardous environments, hospitals, wind farms, renewable energy sites, and portable transformers where smaller and lighter devices are needed.This Small Business Technology Transfer Research (STTR) Phase I project will address the research and development of a new generation of medium voltage distribution utility-grade transformers. This dry-type transformer will be constructed on toroidal iron cores. Therefore, the core has a gapless construction yielding transformers with extremely low no-load losses. Toroidal transformers are not currently in use in distribution systems due to the lack of experience with their design at medium and high voltages. These transformers will be manufactured with a special patented electrostatic shield. The technology allows manufacturing using a minimum amount of insulation between windings/layers to withstand overvoltages; this facilitates the control of the temperature rise as well. The low energy dissipation of this technology allows designing dry-type transformers with size, price and efficiency comparable to oil-immerse standard transformer designs. Thus, the final objective of the project is to replace oil immersed overhead transformers with dry toroidal units, reducing the potential for violent faults (explosions) in addition to the environmental benefits of avoiding the use of oil. The final product will be unique in terms of efficiency, with very low acoustic and electromagnetic noise, and high overload capability among other technical advantages.