In a step-up transformer, the increase in voltage comes from a higher number of turns in the secondary coil, which does not violate conservation of energy because voltage itself is not energy. When voltage increases, current decreases to maintain the same power output, as described by the equation P=IV. This is beneficial for reducing power loss in transmission lines, as lower current results in less heat generated due to resistance. The use of alternating current (AC) is essential for transformers, as it allows for efficient voltage changes. Overall, transformers are crucial for transmitting electricity over long distances by stepping up voltage to minimize losses.