How do eddy currents cause energy loss in transformers?

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In a transformer, eddy currents cause energy loss by generating unwanted heat within the iron core. These currents are small, circulatory electric charges induced within the conducting metal of the core by the changing magnetic field created by the alternating current in the transformer's coils.123

Because these currents flow through the metal, they encounter resistance, which dissipates energy as heat. This process represents a loss of power, as the energy is diverted from the intended flow of electricity between the primary and secondary coils. To mitigate this inefficiency, transformer cores are constructed using thin, insulated laminations or sheets, which physically restrict the paths available for these currents to circulate, thereby reducing the amount of heat produced.123