This paper investigates the cooling performance of a shallow geothermal energy method in relation to the cooling system of a 75 kVA oil-immersed transformer. A thermal analysis of the complete system is presented and then validated with experimental data. The cooling performance of the shallow geothermal cooling method is indicated by its cooling capacity and average oil temperature. The results of this study show that the average oil temperature can be reduced by nearly 30 °C with the aid of an 8 m deep U-pipe borehole heat exchanger, thereby making it possible to increase the capacity of the transformer. By increasing the water flow rate from 6 L/m to 15 L/m, the average oil temperature could be lowered by 3 °C. In addition, the effects of changing the circulating water flow direction and the activation time of the shallow geothermal cooling system were investigated. The results of the thermal analysis are consistent with the experimental data, with relative errors below 8%. The results of the study confirm that a larger temperature difference between the cooling water and the transformer oil at the inlet of the heat exchanger can increase the overall heat transfer rate and enhance the cooling performance of the shallow geothermal cooling system.