The transformer is based on two principles: first, that an electric current can produce a magnetic field (electromagnetism), and, second that a changing magnetic field within a coil of wire induces a voltage across the ends of the coil (electromagnetic induction). Changing the current in the primary coil changes the magnetic flux that is developed. The changing magnetic flux induces a voltage in the secondary coil.

An ideal transformer is shown in the adjacent figure. Current passing through the primary coil creates a magnetic field. The primary and secondary coils are wrapped around a core of very high magnetic permeability, such as iron, so that most of the magnetic flux passes through both the primary and secondary coils. If a load is connected to the secondary winding, the load current and voltage will be in the directions indicated, given the primary current and voltage in the directions indicated (each will be alternating current in practice).

Induction law

The voltage induced across the secondary coil may be calculated from Faraday's law of induction, which states that:





where Vs is the instantaneous voltage, Ns is the number of turns in the secondary coil and F is the magnetic flux through one turn of the coil. If the turns of the coil are oriented perpendicular to the magnetic field lines, the flux is the product of the magnetic flux density B and the area A through which it cuts. The area is constant, being equal to the cross-sectional area of the transformer core, whereas the magnetic field varies with time according to the excitation of the primary. Since the same magnetic flux passes through both the primary and secondary coils in an ideal transformer, the instantaneous voltage across the primary winding equals 





 Taking the ratio of the two equations for Vs and Vp gives the basic equation for stepping up or stepping down the voltage,





Np/Ns is known as the turns ratio, and is the primary functional characteristic of any transformer. In the case of step-up transformers, this may sometimes be stated as the reciprocal, Ns/Np. Turns ratio is commonly expressed as an irreducible fraction or ratio: for example, a transformer with primary and secondary windings of, respectively, 100 and 150 turns is said to have a turns ratio of 2:3 rather than 0.667 or 100:150.

Ideal power equation

If the secondary coil is attached to a load that allows current to flow, electrical power is transmitted from the primary circuit to the secondary circuit. Ideally, the transformer is perfectly efficient; all the incoming energy is transformed from the primary circuit to the magnetic field and into the secondary circuit. If this condition is met, the incoming electric power must equal the outgoing power:




giving the ideal transformer equation,





Transformers normally have high efficiency, so this formula is a reasonable approximation.
If the voltage is increased, then the current is decreased by the same factor. The impedance in one circuit is transformed by the square of the turns ratio. For example, if an impedance Zs is attached across the terminals of the secondary coil, it appears to the primary circuit to have an impedance of (Np/Ns)2Zs. This relationship is reciprocal, so that the impedance Zp of the primary circuit appears to the secondary to be (Ns/Np)2Zp.

Detailed operation

The simplified description above neglects several practical factors, in particular the primary current required to establish a magnetic field in the core, and the contribution to the field due to current in the secondary circuit.

Models of an ideal transformer typically assume a core of negligible reluctance with two windings of zero resistance. When a voltage is applied to the primary winding, a small current flows, driving flux around the magnetic circuit of the core. The current required to create the flux is termed the magnetizing current; since the ideal core has been assumed to have near-zero reluctance, the magnetizing current is negligible, although still required to create the magnetic field.

Energy losses

An ideal transformer would have no energy losses, and would be 100% efficient. In practical transformers energy is dissipated in the windings, core, and surrounding structures. Larger transformers are generally more efficient, and those rated for electricity distribution usually perform better than 98%.

Experimental transformers using superconducting windings achieve efficiencies of 99.85%. The increase in efficiency can save considerable energy, and hence money, in a large heavily-loaded transformer; the trade-off is in the additional initial and running cost of the superconducting design.

Losses in transformers (excluding associated circuitry) vary with load current, and may be expressed as "no-load" or "full-load" loss. Winding resistance dominates load losses, whereas hysteresis and eddy currents losses contribute to over 99% of the no-load loss. The no-load loss can be significant, so that even an idle transformer constitutes a drain on the electrical supply and a running cost; designing transformers for lower loss requires a larger core, good-quality silicon steel, or even amorphous steel, for the core, and thicker wire, increasing initial cost, so that there is a trade-off between initial cost and running cost.
Transformer losses are divided into losses in the windings, termed copper loss, and those in the magnetic circuit, termed iron loss. Losses in the transformer arise from:

Winding resistance

Current flowing through the windings causes resistive heating of the conductors. At higher frequencies, skin effect and proximity effect create additional winding resistance and losses.

Hysteresis losses

Each time the magnetic field is reversed, a small amount of energy is lost due to hysteresis within the core. For a given core material, the loss is proportional to the frequency, and is a function of the peak flux density to which it is subjected.

Eddy currents

Ferromagnetic materials are also good conductors, and a core made from such a material also constitutes a single short-circuited turn throughout its entire length. Eddy currents therefore circulate within the core in a plane normal to the flux, and are responsible for resistive heating of the core material. The eddy current loss is a complex function of the square of supply frequency and inverse square of the material thickness. Eddy current losses can be reduced by making the core of a stack of plates electrically insulated from each other, rather than a solid block; all transformers operating at low frequencies use laminated or similar cores.

Magnetostriction

Magnetic flux in a ferromagnetic material, such as the core, causes it to physically expand and contract slightly with each cycle of the magnetic field, an effect known as magnetostriction. This produces the buzzing sound commonly associated with transformers, and can cause losses due to frictional heating.

Mechanical losses

In addition to magnetostriction, the alternating magnetic field causes fluctuating forces between the primary and secondary windings. These incite vibrations within nearby metalwork, adding to the buzzing noise, and consuming a small amount of power.

Stray losses

Leakage inductance is by itself largely lossless, since energy supplied to its magnetic fields is returned to the supply with the next half-cycle. However, any leakage flux that intercepts nearby conductive materials such as the transformer's support structure will give rise to eddy currents and be converted to heat. There are also radiative losses due to the oscillating magnetic field, but these are usually small.

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