This study investigates the operation of a balanced calorimeter using Computational Fluid Dynamics (CFD) and experimental methods. The analysis focuses on a 30 kW calorimeter for testing electrical machines. The considerations of thermal performance in terms of heat leakage and measures to improve the design are highlighted. The results from the thermal analysis provide guidelines for the designers to improve the design of high-precision calorimeters in terms of calorimeter topology, material selection, sizing and control arrangements. The calorimeter can also be extended to measure power losses in other electrical and electronic devices if the size and power loss rating fall in the calorimetric test range.