According to EDF, the transformer is powered by Envirotemp FR3, which is made from edible soya beans, and is an "environmentally-friendly alternative" to depleting mineral oils.
Paul Dyer, a transformer specialist for EDF Energy, said the installation in Luton is a trial for the technology and if deemed successful it hopes to roll it out across London, the south-east and the East of England.
He added: "This new technology complements the commitment to the environment which runs throughout our company - it brings many advantages and is one of the cleanest types of transformer available today."
The energy supplier recently begun a consultation for its new nuclear power station planned at Hinkley Point.
EDF claims the plant would generate around 1,600 megawatts of electricity, enough for two million homes.
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