 Energy is sometimes defined as "the ability to do work". If an object can be put to work, then it has energy. Energy itself can take many forms:
Energy an be converted from one form to another. There are many ways this can happen; here are just a few examples.  The energy in the food we eat gets turned into stored chemical energy, which your muscles turn into mechanical energy and heat.  Chemical energy stored in batteries gets converted to electrical energy, which in turn becomes light and heat energy.  Electrical energy is converted to light and heat (infrared energy).  Light energy from the Sun is converted to chemical energy in plants, through a process called photosynthesis.  Electrical energy is converted to heat and light.  The chemical energy stored in gasoline burns and the resultant gas pressure becomes mechanical energy as the pistons move, eventually becoming kinetic energy as the car moves, as well as to heat and sound energy.  The potential energy of the water held at height behind a dam is allowed to fall, becoming kinetic energy. The falling water hits a turbine, becoming mechanical energy. This turns a generator, which converts the energy to electricity, as well as to sound and heat energy.  Light energy from the Sun is converted to electricity by solar panels, using a process called the Photoelectric Effect. This process was explained by Albert Einstein in 1905, for which he won his (only!) Nobel Prize. Efficiency As described by the laws of thermodynamics, energy can be neither created nor destroyed, only changed in form. Entropy (disorder) is always increasing, so even the change of energy from one form to another also 'loses' energy to the surroundings, usually in the form of heat and sound. The less energy loss of wasted energy, the more efficient the transfer. Knowing how efficient an energy conversion process is helps us to select processes that use the least amount of source energy for the desired final use. When energy is converted from one form to another, or moved from one place to another, there is always energy loss. This means that when energy is converted to a different form, some of the input energy is turned into a highly disordered form of energy, like heat. For example, of the large amount of chemical energy contained in gasoline, only about 20% is available to turn the wheels; the rest is lost to friction as heat and sound in the engine, other mechanical parts, and the drive shaft. Energy conversion efficiency can be calculated by dividing the useful energy output by the total energy input, and expressing it as a percent. 
As an example, a vehicle engine makes several energy conversions. The first is from chemical (potential) energy in the battery into thermal energy (heat) in the combustion of the fuel. The second is from that thermal energy to mechanical energy through the engine functioning. That mechanical energy goes through several other mechanical energy changes, from the pistons to the final drive of the wheel axles. Some of the mechanical energy is converted to electrical energy by generators. Every time the energy is changed in form, some of it is lost to the surroundings as heat and sound energy.
We never get 100% of the available energy from a source converted into useful work energy. In this example, we may only end up using 15-30% of the energy contained in the fuel!
It follows then that in energy conversion, the process with the fewest steps (with the fewest number of energy transformations), will result in the most efficiency. For example, you could harness the energy from coal by using it to heat water to make steam, use the steam to turn a turbine, and use the mechanical energy from the turbine to spin a generator to produce electricity. This method would lose energy to heat and sound at every step. Atlernatively you could use solar cells to capture sunlight and produce electricity, a more efficient solution. 
New technologies can also help to increase the efficiency of energy conversions. Old vehicle headlights used to use incandescent bulbs, which were a highly inefficient way to convert electricity to light, wasting a lot of energy that became heat. Now, LED technology is used in headlights, which lose very little energy to heat.(Interestingly, heat loss by incandescent bulbs was sometimes useful. Traffic lights used to be kept clean of snow by the heat from the bulbs. Newer LED signals have very little waste heat, so they tend to be obscured by unmelted snow). Another way to minimize the importance of losses of energy to heat is to start with a very high energy source, such as nuclear energy, making any losses during conversion less important from an efficiency standpoint. This excess heat, however, will cause its own problems as it must be gotten rid of safely. You can measure the efficiency of any energy conversion process using this formula: Efficiency = Useful energy output as a percent total energy input Example: An incandescent light bulb releases 62 kJ of ight energy, from an input of 1560 kJ of electricity. Calculate its efficiency. Efficiency = 62/1560 = 0.04 = 4% Here are some typical efficiencies of various energy conversions:
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