Energy of the universe is present either as kinetic energy or as potential energy. During a physical or chemical change, the energy may be converted from one form into another. For example, the water stored in a dam possesses potential energy by virtue of its position. When this water is allowed to fall, its potential energy changes into kinetic energy. Due to its kinetic energy, the falling water can rotate the turbines and produces electricity. Thus, the potential energy gets converted into kinetic energy. In other word, the total energy remains constant when a body changes its position, though one form of energy may be converted into another. This leads to an important conclusion known as conservation of energy and has been put in the form of a law known as first law of thermodynamics.
According to this law, energy can neither be created nor destroyed although it can be converted from one form into another.
This law holds good in chemical reactions also. Energy may be absorbed or evolved in chemical reaction but the total energy of the reacting system and the surroundings remains constant. This law has been stated in several other ways but the basic idea remains the same i.e., conservation of energy. For example, the law can also be stated as
i) The total energy of the universe remains constant.
ii) The energy of the system that is isolated from its surroundings (i.e., isolated system) is constant.
According to first law of thermodynamics: ∆E = q + W