If hot water is generated by direct injection of steam, in a closed circulation system, hot water tanks overflow by a quantity equal to the quantity of steam injected.

When hot water is used in a closed circulation loop, to raise the return hot water temperature to set point, steam is used. Often steam is directly injected into the hot water tank. While injection of steam raises the temperature to set point, this direct injection of steam also adds mass to the system. As a result the total mass of water in the tank rises and the excess water then overflows from the tank. This over flow is at a high temperature (set point) and thus carries away useful heat with it. This is in addition to the loss of water that gets drained by means of the overflow.

Consider a hot water circulation system with a flow rate of 10kL/hr. Let steam at 3 barg be injected into the tank to maintain the hot water temperature

Thus in a closed loop system this quantity of 153 lts will overflow. This translates to a loss of more than 1,213 KL of water and a fuel loss of close to 3.5 Tonnes of coal or 1.2 KL of Furnace oil per year!