Energy is lost during transmission of electricity mainly due to the resistance of the cables used for carrying electricity. To reduce the amount of energy lost, electricity is transported over the grid at a very high voltage. A higher voltage allows the same energy to be transmitted with a reduced current flowing through the wires. Power loss is equivalent to the product of the resistance of the wires used to transmit energy and the square of the current flowing through them. Even a small decrease in the current flow reduces the energy lost by a large extent.
When electricity is transmitted using alternating current, energy is also lost due to the capacitance and inductance of the conductors through which the current flows. This can be reduced by using high voltage direct current for transmission of electricity over large distances.