This article presents the analysis of first and second laws of thermodynamics in a 7.7 MW steam power plant located in Torbali (Izmir, Turkey). it involves a fluidized bed, a waste heat boiler (WHB) and an economizer as subsystems. Fans, pumps, cyclone and chimney are also considered through the analysis as auxiliary systems in the thermal plant. The analysis is performed for the whole system and subsystems by considering the available energy balance. In this analysis which consists of a detailed fluidized bed coal combustor (FBCC) model, the amount of irreversibilities occurring in the system is calculated at each location. Analysis results are compared with the test results obtained from the measurements at several locations in the system and good agreement is observed. These measured values are the temperatures at three levels in the FBCC and boiler, economizer exit temperatures as well as flue gas composition at the boiler exit and steam flow rate. The maximum error observed in temperature values and steam flow rate is about 3.03% and 4.03%, respectively. Through the developed and validated model, effects of excess air and ambient temperature on first and second law efficiency of the subsystems and overall system are investigated. The second-law analysis reveals that the FBCC has the largest irreversibility, with about 80.4% of the total system exergy loss. The FBCC temperature, first and second law efficiencies decrease 19.8%, 5.1% and 5.2%, respectively, as the excess air increases from 10% to 70%. Also steam flow rate decreases 5.1%. As the ambient temperature increases from 25 to 45 degrees C, the FBCC temperature, system first and second law efficiencies increase 0.8%, 1.3%, and 1.3%, respectively. (C) 2009 Elsevier Ltd. All rights reserved.