Transformers and Gas-Insulated Switchgear (GIS) are critical components of the smart grid, each playing a vital role in the generation and utilization of electrical energy. For safe and reliable operation, the moisture inside the Transformer and GIS are to be maintained within a prescribed limit. This paper presents a preliminary study on a new, noncontact, eddy current sensor for measuring relative humidity with the motivation of moisture measurement in a smart-grid environment. The sensor has a high-performance planner single spiral coil etched on a copper cladded Printed Circuit Board (PCB). The target is fabricated using fluorine-doped tin oxide (FTO) glass as the base substrate. A thin film of porous alumina (AlO3) is used as a sensing layer for detecting the presence of moisture at the %RH scale. The performance of this developed eddy current sensor was tested with and without sensing film. Experiments were con- ducted to determine the static response parameters of the sensor in the presence of moist gas, the concentration of which was measured by a commercial %RH meter. Sensor shows a very low sensitivity of 20 mΩ/%RH with the variation of (941.46–943.41) Ω without any sensing film with a fix frequency 30 MHz and fix distance 2 mm. Due to the adsorption of water molecules in the hydrophilic film, the conductivity of the target changes which leads to change in eddy current of the target. The sensor shows a good overall sensitivity (130 mΩ/%RH) over the moisture range of 0–98% RH with moisture sensing film.