AbstractThis paper develops a technical framework for the next‐generation power grid transformer (NGPGT) for grid renewables. This framework is structured to overcome the environmental challenges produced by the explosive use of nonrenewable base energy generation sources. The use of these sources cannot meet the required electricity for the world's growing community due to their availability, cost, and lack of flexibility. However, modern energy systems focus on the use of renewable energy sources, where the grid transformer's interaction plays an essential role in their generation, transmission, and distribution. The lack of centralization, local monitoring, interoperability, authenticity, and precise bi‐directional flow may limit the application of current framework power grid transformers in grid renewables. In this paper, a new technical framework, called NGPGT, is developed by introducing some extended features for addressing the challenges shown in current‐generation transformers. This is structured by enabling some advanced technical features with the existing framework, which includes automatic condition monitoring, intelligent inverters, edge computing, automatic controlling, and intelligent management. This paper also illustrates the benefits and scope of the NGPGT compared to the existing transformer by assembling essential requirements and obligatory components. Additionally, this paper highlights a few difficulties of implementing NGPGT in terms of operational, communication, energy management, and economic points of view, which may enable further research scopes for the researchers.