How do friction and imperfect insulation reduce the efficiency of a power plant?

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Logs burning in a fireplace with bright flames. — heat What's the relationship between heat and temperature?

In the context of physics, the efficiency of a power plant is fundamentally constrained by the second law of thermodynamics, which dictates that a portion of heat must be exhausted as waste to the environment.1

While the theoretical maximum efficiency is determined by the operating temperatures of the system, practical efficiency is further reduced by physical imperfections. Specifically:1

Friction: Mechanical resistance within the moving parts of a power plant dissipates energy, converting work that could have been harnessed into unwanted heat.1
Imperfect Insulation: Inadequate thermal insulation allows heat to leak from the system into the surroundings. This loss prevents the full utilization of the thermal energy intended for conversion into work.1

Because of these real-world factors, the actual efficiency of power plants is typically lower than the theoretical limit, rarely exceeding 60 percent, even though the laws of thermodynamics set a higher absolute ceiling on potential performance.1