Power Generation Handbook: Selection, Applications, Operation, and Maintenance

A transformer is a device that uses the action of a magnetic field to change alternating current (AC) electric energy at one voltage level to AC electric energy at another voltage level.1 It consists of a ferromagnetic core with two or more coils wrapped around it. The common magnetic flux within the core is the only connection between the coils. The source of AC electric power is connected to one of the transformer windings. The second winding supplies power to loads. The winding connected to the power source is called primary winding, or input winding. The winding connected to the loads is called the secondary winding, or output winding.
When a transformer steps up the voltage level of a circuit, it decreases the current to keep the power equal. Therefore, AC power can be generated at one central station. The voltage is stepped up for transmission over long distances at very low losses. The voltage is stepped down again for final use. Since the transmission losses are proportional to the square of the current, raising the voltage by a factor of 10 will reduce the transmission losses by a factor of 100.
Also, when the voltage is increased by a factor of 10, the current is decreased by a factor of 10. This allows the use of much thinner conductors to transmit power.
In modern power stations, power is generated at 12 to 25 kilovolts (kV). Transformers step up the voltage to between 110 and 1000...