The fluid enters at the plane 1 at pressure , velocity  and exits at pressure  and velocity Mechanical energy is added to the system by a fan as shown in the figure. The mass and energy balance at the steady state is:

(2)

Many different kinds of energy and energy changes are to be considered when the fluid flows from plane 1 to plane 2. In the following all energy terms are expressed in  of mass of fluid.

Potential energy: It is the energy possessed by the fluid by virtue of its mass, position and gravity. Potential energy is numerically equal to gZ₁ and gZ₂ at positions 1 and 2 respectively.

(3)