Why is the efficiency of a transformer so high?

The efficiency of a transformer depends on its design and is equal to the power output divided by the power input. The difference between these two quantities is the power loss, which comes out in the form of heat.

The power loss has two components, which are the power lost in the resistance of the windings, known as the copper loss, and the power lost in eddy currents in the magnetic core, the iron loss.

The copper loss depends on the current, while the iron loss depends on the voltage.

To increase the efficiency the designer can use thicker wire and a more massive iron core. Both these measures increase the size and cost of the transformer.

Small Transformers for electronic equipment might have efficiency of 80-90%, while power transformers used in electricity supply might have efficiency of 98%. It is necessary to use higher efficiency at the higher power levels because the amount of energy wasted is significant.