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Do larger Power Supplies use more electricity ?

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Generally, Power Supplies (PSUs) only deliver the ammount of power needed for the system to run. So, if your system components require 300W, and you use a 500W PSU, it would still only consume 300 watts.

What matters is the efficiency of the power supply. A PSU that runs at 85% efficiency will use less electricity (and dissipate less heat) than one that runs at 75% efficiency. Therefore, it is always a good idea to use an efficient power supply. Generally, power supplies run at ~70-75% efficiency, with some certified as 80 PLUS (80%+), and some server power supplies reaching up to ~94% efficiency.

With that said, keep in mind that efficiency is not constant across the different levels of power consumption. Efficiency of power supplies generally peaks at 50%-75% of the PSUs rated load. The curve varies from a model to model, however, as a rule of thumb one should buy a PSU such that the calculated typical consumption of ALL components is between 50%-60% of the rated PSU capacity.


Notes:
The 80PLUS certification actually requires that a PSU runs above 80% efficency with loads from 20% to 100% (with the highest efficiency still ~50% load). Actual efficiency curves can be found a their website


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