Potential energy is the energy stored in a substance, that has the ability to do work. Unless otherwise specified, it usually refers to gravitational potential which is the energy an object has due to its position. An object at a greater height has more gravitational potential energy than one at a lower height. For example, if a rock is dropped from a second story window and another is dropped from a third story window and both hit a car below, the one that fell from the greater height will do the most damage.
There are other forms of potential energy. Chemical potential energy is the energy that can be released during chemical reactions. For example, in a car engine the chemical energy stored in gasoline is converted to thermal energy.
Electrical potential energy is the energy of electrostatic attraction (attraction of opposite charges.)
Nuclear potential energy is the energy converted to heat, light and radiation during a nuclear reaction.
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