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Potential drop, also called voltage drop, is the difference in power between two points of the same system. Conductive material has an inherent resistance to electric flow. As the current moves through the conductor, this resistance transforms some of the potential electrical energy into heat. The amount of loss is the amount by which the potential electric power changes between the two ends of the conductor, or the potential drop. While this drop is undesirable in many parts of an electrical system, it is very important to other parts.
In a simple wire, the potential drop is based solely on the resistance of the conductor. As the current moves through the wire, a set amount of energy is transformed to heat. This is generally a known property of the conductor, meaning it is simple to find the potential drop simply by knowing how long and thick the wire is. While slight impurities in the conductor or irregularities in voltage will alter this value, it is generally only a negligible difference.
When transferring large amounts of voltage, potential drop is a major problem. If 50% of transmitted electricity to a neighborhood simply disappears, the electric company would have a major problem. Customers might not have enough power for their homes and businesses and rates would have to increase to compensate for the power loss.
The easiest way to limit potential drop is to simply increase the diameter of the wire. The larger the diameter, the more space the power has to move through the system, resulting in less electricity lost to heat. While this works well to a point, it is a passive measure and often active measures are more efficient. These usually center on using higher initial voltages and shortening the distances between power loads.
A secondary use of potential drop is used in fluid dynamics. This usage describes a nearly identical situation to the electrical meaning, just as it applies to pipes and fluid. The fluidic usage is the difference between the pressures of a fluid at two different points of a system.
In both cases, the potential is the description of what the energy has the ability to do rather than what it is doing. When electricity is lost to resistance, it loses potential energy; essentially the electricity has less ability at one end of a wire than the other. When describing fluid pressure, the liquid has less potential energy as well. Since it has a lower pressure, it requires more liquid to accomplish the same task as a fluid with higher pressure.