Ethanol has about 75% (give or take) of the energy density of gasoline but it requires much less oxygen to burn efficiently since it brings some of it’s own oxygen to the combustion chamber. That means you can put more E85 in the combustion chamber, have it burn efficiently, and end up with a net increase in power the engine produces but with reduced mileage.
I assume you’re referring to ‘fuel’ race cars burning alcohol. In this case, they’re actually burning methanol rather than ethanol. Methanol has a lower energy density than ethanol but you can put even more of it in the combustion chamber so the engines produce considerably more power than gasoline or ethanol/gasoline mix. For methanol, you need a ratio of 7 parts air to 1 part fuel. For gasoline, you need 14 parts air for 1 part fuel in the combustion chamber for efficient combustion. That’s what creates the large difference in power between alcohol and gasoline.
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