Conservation of Energy

The first law of Thermodynamics is that energy can be transferred, stored and dissipated but cannot be created nor destroyed.

For example, when you plug your phone into a socket to charge it, electrical energy is turned into chemical energy in your phone's battery. And using the chemical energy that was being charged by the electrical energy from the socket to power things such as the screen which turns the chemical energy into light energy, or play sounds by converting it into sound energy. 

But you can never have 100% energy transfer, it's because there will always be wasted energy.
Most wasted energy is lost due to the energy generating heat, like when you are charging something your phone gets warmer, or a car tyre is spinning rapidly causing friction which causes the tyre to get warmer.  

There are types of systems: closed and open systems. First, we have to select one. Let's say we take your phone as a system. The system would be the phone, while the outside world would be named the "environment." In this case, the phone would be an open system because it can be affected by the environment or outside factors. Because this is an open system, energy can flow between the environment and the system.

While a closed system stops all outside factors or the environment entirely.
If you put your phone in a sealed jar. Everything inside the jar is the system, and because it is in a sealed jar it is not affected by outside forces or environment factors.
So when the phone heats up, the heat is trapped inside the jar and it stays within the system.