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The solution is I=P/V=500 A, then the power loss in the lines, P(loss)=I^2R=(500A)^2*0.04ohms=100kW

Here I don't understand why Ploss=I^2*R? I mean is that supposed to be power output, so then in order to find the power loss, we need to use Power input 120kW-output 100kW, then 20 is the power loss?!! Because when I see 'loss', it's like a common sense to use subtraction, but how come here is not? thanks for help.