Solar storms are inevitable and have a number of negative effects on technological systems, the power grid being no exception. High geoelectric field values due to severe geomagnetic storms cause geomagnetic induced currents to flow in conducting structures of the power system. The geomagnetic induced currents will enter and leave the power grid through the neutral grounding of power transformers. This may cause half-cycle saturation of the transformer core, which in turn leads to high levels of harmonics in transformer currents, increased transformer reactive power consumption and heating of transformer. Furthermore, flow of geomagnetic induced current in power transformers can cause tripping of components with to sensitive safety limits and damaging of transformer. Cascading failure may be initiated, which in turn can lead to blackouts and loss of production. The effects of geomagnetic induced current on power transformers should be further investigated. In addition, a basic knowledge of solar storms, geomagnetic induced currents and their effects on power transformers and power systems should be provided.