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The reason for cladding a flywheel was to stop it producing a draft. Something you would not want in a cotton mill as it would whip up the cotton waste which would then get caught in the spinning making an uneven thread or clump together as a fire hazard.
I agree with a smaller high speed engine windage losses of flywheels can be significant but with these slow running 2000+ HP engines with flywheels of 40+ tons ? Jo