An economizer is a heat exchanger which acts to preheat the boiler feedwater by transferring heat from the flue gas stream. The flue gas stream contains excess heat from the combustion process.
The heat exchanger is referred to as an economizer because for every 40 degrees Farenheit which the flue gas temperature is decreased, there is a one percent increase in the the thermal efficiency of the plant. As the thermal effiency of the plant increases, the plant saves money by utilizing the heat from an existing source instead of requiring heat from another external source.