It heats up the wires and is dissipated into the air.
Actually, the electricity can go considerable distances. Especially if High Voltage Direct Current is used. There is at least one such link in the United States (but I’m not finding an on-line reference for it at the moment)
From Wikipedia:
“The longest HVDC link in the world is currently the Inga-Shaba 1700 km (1056 mile) 600 MW link connecting the Inga Dam to the Shaba copper mine, in the Democratic Republic of Congo.”
http://en.wikipedia.org/wiki/HVDC
Politicians are famous for ignoring laws they don't care for;especially irritating to them are the laws of nature,including laws of physics.
Same power level, but lower currents equal less resistance drop.
It's not perfect by any means, but is one reasonable engineering solution.
The real problem is political. Communists like single supplier solutions. To them one rilly rilly rilly big ultramega power plant that they control is the ideal solution.
To me, a vast network of vest pocket power sources is much more robust and immune to a single point failure or attack.
superconductor electric power transmission using next-generation, high-temperature superconductor (HTS) wire may be a way to send electricity large distances to other grid systems.
Even though the resistance to current flow is zero, there are energy losses. Superconducting hysteresis loss (AC loss)is the resistance to the change in magnetic field is alternating current systems. Other energy losses are heat leak through the insulation and through the terminations at the ends of the superconductor, and dielectric losses in the material between the conductors.
Even with various energy losses, it will be possible to transmit huge amounts of power over distances not seen before.