Exothermic reactions release energy into the surroundings, whereas endothermic reactions absorb energy. Hand warmers, glow sticks and self heating coffee are all applications of energy changes in chemical reactions. For the higher tier of GCSE Chemistry, you will be expected to explain how and why these energy changes occur. The short answer to 'how' is that during a chemical reaction, bonds are broken and made. The short answer to 'why' is that energy is involved in making and breaking bonds.
In a chemical reaction, you always end up with the same numbers and types of atom as you started with, but joined together in a different combination. For example, the reaction between hydrogen and oxygen to give water. To start with, the hydrogen atoms are joined to each other in pairs, as are the oxygen atoms. At the end of the reaction, two hydrogen atoms are joined to one oxygen atom in the compound water. Clearly, to get to this state of affairs, the bond between the hydrogen atoms must have been broken and so must the bonds between the oxygen atoms. Only when that has occured can the bonds of the water molecule form.
It stands to reason that to break the bonds between the hydrogen atoms will require an input of energy to make it happen. The same goes for the bonds between the original oxygen molecules. But when the hydrogen atoms join with oxygen atoms, it happens spontaneously and energy is released as the bonds of the water molecule form. Since the bonds that have been formed are different to the original bonds, it is unlikely that the same amount of energy will be released as was used in the first place. If more is released from bond making than was used for breaking the original bonds, energy will be released into the environment and the reaction is exothermic. if less is released, then the reaction is endothermic.
This can be represented on an energy level diagram. It is just a simple graph that shows the energy changes in a reaction. On the vertical axis, you have the energy and along the horizontal axis you have the progress of the reaction. The diagram itself shows the level of energy in the reactants and products as two short horizontal lines. If the products appear lower than the reactants, energy must have been lost from the system. This energy must have travelled into the surroundings i.e. an exothermic reaction. If the products appear higher than the reactants, the opposite is true.
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