When coal, wood, oil, hydrogen and other chemical elements or compounds are burned, new chemical compounds are produced and heat is released. Burning is the most known exothermic chemical reaction.
The molecules of chemical compounds consist of atoms of two or more different chemical elements. These atoms are kept together in the molecule with electromagnetic forces, known also as van der Waals forces.
Because of these forces, energy is stored in the chemical compound. This energy is called chemical energy.
Mechanism: The molecules of a chemical compound react with another chemical compound, or a chemical element e.g. oxygen, forming new chemical compounds. In order to start a chemical reaction the bonds that keep the molecules together should break. For this energy should be provided. Then new molecules are formed. If the energy (usually heat) provided in order to start the reaction, is less than the energy given when the new molecules are formed, then the reaction is called exothermic. In exothermic reactions the energy released is normally heat and electromagnetic (light).
Speaking in energy terms, in exothermic chemical reactions, a part of the chemical energy stored in the molecules of the original chemical compounds is converted to heat and electromagnetic radiation. Another part is stored in the molecules of the new chemical compounds.