When oil is burned in a power plant, the potential energy of the oil is converted into heat, which increases the kinetic energy of the water.
Burning oil can produce thick black plumes that disperse downwind as they rise into the atmosphere, potentially impacting air quality. Once the fires are out, oily residues in the water can cause environmental damage.
Fossil fuel power plants burn coal or oil to create heat which is in turn used to generate steam to drive turbines. The energy conversion goes from chemical energy stored in the fuels, to heat energy as it burns which is converted to kinetic energy as it drives large turbines which generate electricity.
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