Steam is formed when water vaporizes to form a gas. In order for the vaporization process to occur, the water molecules must be given enough energy that the bonds between the molecules (hydrogen bonds, etc.) break. This energy given to convert a liquid into a gas is called 'latent heat'.

Steam-based heating processes use latent heat and transfer it to a given product. When the work is done (i.e. steam has given up its latent heat), steam condenses and becomes condensate. In other words, condensate does not have the ability to do the work that steam does. Heating efficiency will therefore suffer if condensate is not removed as rapidly as possible, whether in steam transport piping or in a heat exchanger.