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If I buy a 500W PSU but most of the time my machine only needs under 100W.

Will the redundant power transfers to heat?

If this is true, does this mean that buying a PSU of W closely matching the power consumption of the machine can reduce the heat generated by the PSU?

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No. Modern PC PSUs are switching, which means that if the load is reduced then the PSU's circuitry will be in the "off" phase for more of the time (which actually results in lowered heat output due to the fact that the losses are mostly proportional to the load).

But even in linear power supplies a reduced load will not result in increased heat output.

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