What contributes to reduced efficiency in distribution transformers during high temperatures?

The correct answer highlights that insulation degradation is a significant factor contributing to reduced efficiency in distribution transformers during high temperatures. As the temperature within a transformer rises, the insulation materials used to protect the internal components begin to break down. This degradation leads to an increase in electrical resistance and can create partial discharge or dielectric failure within the transformer.

When insulation deteriorates, it not only affects the transformer's ability to manage electrical loads effectively but can also result in increased heat generation due to losses that occur in the winding and core materials. This cycle of rising temperatures causing further insulation breakdown ultimately lowers overall efficiency and can lead to premature failure.

Other factors mentioned, such as circuit overload, improper installation, and voltage fluctuations, while they may also impact transformer performance, do not specifically pertain to the reduction of efficiency caused by high temperatures in the same direct way that insulation degradation does.