A transformer is a vital component of the power grid infrastructure as it facilitates efficient transmission, distribution, and utilization of electrical energy, and ensures reliable and uninterrupted power supply to consumers. As the demand for electricity in a power grid increases, additional transformers with higher ratings may be required to handle the increased load. Therefore, the reduction of losses in power transformers is essential for optimizing energy efficiency, reducing costs, and maintaining a reliable power grid. Stray loss which is 20-25% of the total load loss of the transformer, can affect power quality by introducing harmonics into the power grid. Stray losses also increase the temperature, and cooling requirement for the transformer. In addition to the power grid’s cost and performance, the transformer’s lifetime is also important, which ultimately depends on the amount of losses. Therefore, to compromise between the cost and performance and guarantee losses, it should be reduced. In reducing stray losses, shielding is an effective technique that generates opposing fields to the stray flux or establishes a path with lower reluctance. In this study, the three-dimensional finite element method (FEM) is employed to accurately assess the stray losses in the structural components of a 250 MVA power transformer. Various factors, including the choice of materials (ferromagnetic and copper) and the strategic placement of shields, are considered to minimize energy losses and enhance the overall efficiency of the transformer.