Does the fact that lights are illuminated here represent a form of loss in efficiency of the power lines by magnetic fields? Would containing the electromagnetic field within the wire improve the wires efficiency or have any affect? Is there an electromagnetic cell that would work similarly to how a solar cell work?
The transmission lines are waveguides rather than plain insulated conductors, and the geometry of the waveguide is optimized to minimize EM "leakage" for current at the AC frequency used in power transmission. As the picture demonstrates, "minimize" is different than "eliminate."
You can do a better job of reducing transmission losses by making the sides and central part of the waveguides thicker (but that means they would weigh more), more perfectly conductive (cost more) and even by getting a cleaner geometry by increasing the tension on the wires so they are straighter (poles have more stress). The solution adopted by power companies accepts a small transmission loss to avoid budget-busting in the other ways.
In fact, if you make your transmission efficiency too perfect, in the presence of randomly fluctuating loads, you begin to hurt your transient stability -- the phenomenon that the inevitable mismatch of the phase of the current at the load and the phase at the generator means the generator starts working against itself , which is a much greater source of inefficiency.
