The heating of the transformer is due to both the heating effect of current and hysteresis loss, and are cooled by circulating oil.

Transformers heat up due to a phenomenon known as core losses, which include hysteresis losses and eddy current losses. Hysteresis losses occur because the magnetic domains in the transformer's core resist changes in magnetization, causing energy to be converted into heat. Eddy current losses happen when the changing magnetic field induces currents in the core material, leading to resistive heating. Both of these processes contribute to the overall temperature rise in transformers.

Transformers can heat up due to various reasons, including:

1. *Electrical Resistance*: As current flows through the transformer's windings, electrical resistance causes heat generation.

2. *Eddy Currents*: Induced currents in the core and other metallic parts cause heat due to electrical resistance.

3. *Hysteresis Loss*: The magnetic core's repeated magnetization and demagnetization cause heat generation.

4. *Flux Leakage*: Inefficient magnetic flux transfer between the primary and secondary windings leads to heat.

5. *Overloading*: Exceeding the transformer's rated capacity causes excessive heat.

6. *Poor Cooling*: Inadequate ventilation or blocked airflow reduces heat dissipation.

7. *Harmonics*: Distorted current waveforms generate additional heat.

8. *Core Saturation*: Magnetic core saturation leads to increased heat.

9. *Winding Insulation Failure*: Breakdown of insulation between windings causes short circuits and heat.

10. *Age and Wear*: Over time, transformers can deteriorate, leading to increased heat.

To mitigate overheating, transformers are designed with features like:

- Cooling systems (air, oil, or water)
- Heat sinks
- Thermal monitoring
- Overload protection
- Efficient magnetic core materials
- Proper ventilation

Regular maintenance and monitoring can help prevent overheating and ensure reliable transformer operation.