Most vegetable oils with suitable viscosity and pour point to be used in natural ester dielectric fluid contains mainly unsaturated fatty acid including oleic (one C=C double bond), linoleic (two C=C double bonds) and linolenic (three C=C double bonds). Soybean oil was chosen among 40 candidate blends of vegetable oils during the development of FR3® Fluid.
While palm oil is widely available in the Southeast Asia region, it is generally considered not suitable to be used in natural ester dielectric fluid due to its high content of saturated fatty acids (~44% palmitic acid) and the resultant high melting point between 30°C to 40°C. While the pour point of some of palm oil fractions can be reduced significantly through multiple fractionization, it would lower the yield significantly and increase the required energy input, making it less economically and environmentally sustainable than FR3 Fluid.
More importantly, even after two fractionizing processes, the pour point of super palm olein (~44% yield from RBD palm oil) can only reach 3°C, which is still significantly higher than the specification of natural ester dielectric fluid required by the international standards such as IEC 62770 and ASTM D6871 (-10°C max). So the super palm olein will not benefit from other standards when it comes to maintenance, tests etc..
Although there are some commercial dielectric fluids in the market that claimed to be derived from palm oil, they are actually methyl ester using fatty acids obtained from palm oil, rather than palm oil (triglyceride) in its natural form. Apart from the high energy demand in producing such methyl ester (which makes its carbon footprint much worse than the normal natural ester fluid), the flash and fire points of such fluid are also much lower (similar to conventional mineral oil) so there is no benefit in term of fire safety.
In summary, from a technical perspective it is very unlikely that any of the palm oil fractions, or derivatives would be a viable option as base oil for natural ester dielectric fluid.
What standards would need to be set in place for Palm Oil to be used as insulating fluid in power transformers?
As mentioned above as the super palm olein would not be considered as a natural ester it would require standard on its own for the operators to know how to handle this new insulating fluid. Standard as following
New oil standard, e.g. IEC 62770
Use and maintenance, e.g. IEC 62975
Transformer, e.g. IEC 60076-14
Dissolved gases, e.g IEEE C57.155
These standards would require 5 to 10 years of experience and probably another 3-4 years in working groups to emerge, leaving in the meantime the operator taking the risk assessment on his own.