The transformer core is manufactured from thin sheets of iron laminated together with insulating glue or paper between. The iron has very high magnetic permeability and low hysteresis loss ensuring that the magnetic field is very strong and that very little energy is lost as heat as the core is magnetised and demagnetised.
The laminations prevent the creation of eddy currents in the core created by the changing magnetic fields.
Transformers are highly efficient but the do convert some of the energy to heat due to the resistance of the coils of wire and to hysteresis loss in the core.
Hysteresis -The changing flux in the core, created by the coil, is essential in the transfer of energy from the primary to the secondary coil. If the core is hard to magnetise and demagnetise then extra energy is needed and the transformer is less efficient. The curves show the relation between the two in different materials. The shaded area is a measure of the energy absorbed in a complete AC cycle.
The first curve is typical of the material used for a transformer core.
A magnet falling in a copper tube is a good example of the creation of eddy currents and the effect they have. These currents form in the copper tube. They form because the magnetic field around the falling magnet is cutting through the tube. These eddy currents create a magnetic field of their own which opposes the movement of the magnet (Lenzʼs Law), noticeably slowing its fall (see video below)