As we know that in some industrial applications 1:1 lighting transformers are used for lighting purpose.
Can you give examples where you have seen such lighting transformers used?
I don't remeber seeing such transformers.
What is the need of this transformers. Whether they reduce short circuit current or avoids the reflection of fault current at secondary side?
That's just my quessing:
Adding a transformer will reduce short circuit current and reduce the reflection of fault current at secondary side.
The transformers will also provide electrical isolation between primary and secondary, which can be used to for various application.
One is to interface different grounding practices on different sides of transformer (for example one side floating and other grounded).
Another possibility could be noise controlling (for example fluorescent or other discharge lighting is feared to cause noise etc..).
Common mode noise refers to the noise or voltage surges that occur between the neutral and ground conductors. It enters
the electrical system from overloaded power circuits, wiring faults and other equipment on the same line. Common sources
include lightning, ignition systems, poor grounds, radio transmitters, poor brush contacts on motors, and any arc.
Transverse mode noise refers to the noise or voltage surges that occur between the hot and neutral conductors. This type
of noise is caused by the firing of SCRs, welders, igniters, switching power supplies, electrical storms and utility switching.
If so why we aren't using at domestic distribution system?
The fault currents at normal domestic distribution system are at such level that there is no extra worry on those.