An energy diagram of a chemical reactions illustrates the changes of energy as the chemical reactions advances.
At first, the energy in the diagram is the energy of the reactants.
As the reaction goes forward, the reactants start to react forming a transition compound, with a maximum energy level on the graph. This is the hill. So the hill represents the Activation Energy.
After that, the energy starts to decrease and at the end you have the energy of the products, which may be higher or lower than the initial energy of the reactants, depending upon whether the reaction is exothermic or endothermic.
For exothermic reactions the energy level of the products is lower than the energy level of the reactants, while for endothermic reactions the energy level of the products is higher than the energy level of the reactants.
