Approximately 1/3 of the useful energy of the fuel is destroyed during the combustion process used in electrical power generation. This study is an attempt to clarify and categorize the reasons for the exergy destruction taking place in combustion processes. The entropy production is separated into three subprocesses: (1) combined diffusion/fuel oxidation, (2) “internal thermal energy exchange” (heat transfer), and (3) the product constituent mixing process. Four plausible process paths are proposed and analyzed. The analyses are performed for two fuels: hydrogen and methane. The results disclose that the majority (about 3/4) of the exergy destruction occurs during the internal thermal energy exchange. The fuel oxidation, by itself, is relatively efficient, having an exergetic efficiency of typically 94% to 97%.