Paper-insulated wires, comprising either a copper or aluminum conductor wrapped with layers of high-quality kraft or diamond-pattern cable paper, represent a classic and highly reliable insulation system. Their classification and primary uses are intrinsically linked to their size (cross-sectional area or dimensions) and the choice of conductor material, catering to different tiers of the electrical power industry.

The size (gauge or cross-section) of the wire is the foremost determinant of its current-carrying capacity and application. Smaller cross-section paper-covered wires (e.g., a few square millimeters) are used in the fine windings of instrument transformers or small reactors, where precise electrical characteristics are needed. Medium-sized wires form the workhorse of the industry, used extensively in the low-voltage (LV) and high-voltage (HV) windings of oil-immersed power transformers and distribution transformers. Large rectangular or square cross-section conductors are essential for the very high-current windings in large power transformers, such as generator step-up units in power plants, where efficient space utilization within the winding pack is critical.

The choice between copper and aluminum as the conductor further refines the application. Paper-insulated copper wire is used where maximum space efficiency, superior mechanical strength under short-circuit stress, and highest conductivity are required, typically in large generator transformers and high-performance applications. Paper-insulated aluminum wire, with its favorable weight and cost advantages, is widely employed in distribution transformers and many power transformers where these factors outweigh the need for a slightly larger coil size to achieve the same resistance. In both cases, the paper insulation is prized for its excellent dielectric properties when impregnated with transformer oil, its thermal stability, and its ability to be layered and folded precisely during the complex transformer winding process. The entire assembly is ultimately dried and impregnated with oil, creating a robust, long-lasting insulation system that has reliably formed the backbone of electrical grids for over a century.