HIGH GRADE ENERGY
Electrical and chemical energy are high-grade energy, because the energy is concentrated in a small space. Even a small amount of electrical and chemical energy can do a great amount of work. The molecules or particles that store these forms of energy are highly ordered and compact and thus considered as high grade energy. High-grade energy like electricity is better used for high grade applications like melting of metals rather than simply heating of water.
LOW GRADE ENERGY
Heat is low-grade energy. Heat can still be used to do work (example of a heater boiling water), but it rapidly dissipates. The molecules, in which this kind of energy is stored (air and water molecules), are more randomly distributed than the molecules of carbon in a coal. This disordered state of the molecules and the dissipated energy are classified as low-grade energy.