A greater volume of electrical power can be transmitted at higher voltages and at a lower line loss. This is because losses are directly proportional to current losses by
I2*R
I = current and
R = resistance
Less current must flow in high-voltage lines to transport equivalent amounts of electric power.
Most electrical equipment operates at lower voltages, so a transformer is needed to step down the voltage from the main distribution lines. The transformer is sized for the maximum expected load, which is also the unit’s peak operating efficiency. As a result, the transformer, seldom loaded to the maximum, operates at a premium.
A system with an oversized transformer, or a system which has experienced a reduction in load since the time it was installed—e.g., from the addition of more efficient computers or other electronic equipment that draws less power—thereafter operates even less efficiently. A correctly-sized transformer minimizes the losses and the heat generated from the resistance to the coils.
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Excerpt from Energy Conservation Projects.