The First Law or principle of conservation of energy states that in a closed system, the amount of energy subject to a process of transformation is fully incorporated in other forms when this process has ended.

If the First Law states that all forms of energy are equivalent in value, the Second Law introduces a notion of quality: energy degrades from noble energy (mechanical, electrical) to heat. According to this law, the amount of usable (noble) energy must decrease in an isolated system, because of the existence of irreversibility. In addition, the upper limit of the conversion efficiency of thermal energy into mechanical work is equal to the Carnot efficiency: eta = 1 - Tc/Th, where Th is the temperature of the source of thermal energy (heat source), and Tc that of the ambient environment (cold source), both expressed in Kelvin or Rankine.

In practical terms, the main energy conversions are as follows:

• photosynthesis ensures the transformation of solar radiation into plant biomass and plankton which, over millennia, have given birth to all of the world's reserves of fossil fuels;

• the combustion of coal, oil and biomass can provide heat, used in many industrial processes, heating, etc. The amount of heat that a given fuel can provide is called its heating value;

• thermal machines allow for transforming either heat into mechanical energy (direct cycles), which can be used directly or converted into electrical energy, or mechanical energy into heat (reverse cycles), for producing cold (refrigeration) for example;

• dynamos and alternators, driven by a source of mechanical energy (motor, turbine), produce electricity;

• friction and the Joule effect convert mechanical or electrical energy into heat;

• nuclear reactors transform fission reactions into heat, which can then be used to generate electricity.

Given that energy conversions are partly irreversible, the efficiency of these processes is lower in practice than the theoretical maximum efficiency.

During combustion the reaction products are found in the gaseous state, and it is possible, at a low temperature, that some of them are liquid or even solid, releasing heat of condensation or solidification.

This problem arises particularly during the combustion of hydrocarbons, water appearing among the products. The maximum energy release is obtained when the water contained in the flue gases is liquefied. The value of the heat of complete reaction is called higher heating value, or HHV. In the most general case where all the produced water remains in the vapor state, it is called lower heating value or LHV.