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The prediction and determination of thermal response for the metallic parts is a very crucial step in the design of power transformers. This paper presents a comparative analysis of different thermal models for predicting the hotspot temperature and top oil temperature of power transformers. Also, a new thermal model is proposed for the monitoring of transformer operation which is capable of identifying the hotspot temperature and the top oil temperature by taking into account the ambient temperature and the load variation with respect to real time. The model is experimentally validated and compared with the actual field data. It is found that results obtained from the proposed model and the actual field data are in good agreement.