Esters are insulating liquids that replace mineral oil. Natural esters come from modified vegetable oils; synthetic ones are made from organic acids and alcohols. Both insulate and cool just as mineral oil does, but they behave differently.
Their advantages are concrete. The fire point exceeds 300 °C against around 150 °C for mineral oil, which allows transformers to be installed indoors and in fire-risk locations with fewer building requirements. They are biodegradable, which reduces the environmental risk of a spill. And they absorb far more water without losing dielectric strength, which extends the life of the paper insulation.
They also have drawbacks: higher viscosity, which means the cooling design has to be reviewed; higher price; and their own diagnostic criteria, because the dissolved gas and moisture thresholds for mineral oil do not apply to them as they stand. IEC 61099 covers synthetic esters and IEC 62770 natural ones.