**Potential energy is defined as the energy possessed by a body due to its position or height above the surface of the Earth.** Water stored in a dam has potential energy. This potential energy has the capacity to do work.

When water falls from a height, its potential energy is used to rotate turbines that generate electricity. Any object falling from a height can cause damage on impact due its potential energy.

When an object is stationary at a height, it possesses potential energy only. When it moves downwards due to the gravitational pull of the Earth, some of the potential energy begins to transform into kinetic energy.

The formula for calculating potential energy is PE = mgh. In this equation, m refers to the mass of the body, g is the acceleration due to gravity, and h is the object's height above the Earth.

The international standard unit for measuring energy is the joule.