Abstract: This study focuses on the efficient recovery and utilization of waste heat from transformers in power grids, incorporating the demands of contemporary development such as the "3060 Dual Carbon Goals" and the construction of new power systems. An innovative transformer waste heat recovery and utilization system is designed, emphasizing three key processes: heat recovery, heat-to-power generation and heat consumption. Through combined innovation involving oil-water heat exchangers, heat pump units, and thermoelectric generation devices, waste heat is transformed into a valuable resource. Additionally, this system integrates thermoelectric generation innovatively, marking the first application of the electrothermal cascade energy utilization mode in the transformer field in China, achieving a two-level co-supply of electricity and heat. Finally, a brief analysis is provided on the economic benefits, social benefits, and promotion prospects of applying this transformer waste heat recovery and utilization system in substations.