A condensing boiler is provided with a condenser, by which the water vapour produced by the burning of gas or oil in the boiler, condenses back into liquid water - hence the name "condensing boiler". The energy contained in the vapour, would without a condenser, normally discharged to the atmosphere through the flue.
A condensing boiler is a boiler provided with a condensing device designed to recover energy normally discharged to the atmosphere through the flue.
When a condensing boiler is working at peak efficiency the water vapour produced by the burning of gas or oil in the boiler condenses back into liquid water - hence the name "condensing boiler". The boiler uses a heat exchanger so that incoming air or water cools the exhaust, forcing the condensation of the water vapour it contains; this heats the incoming air (if an air-to-air heat exchanger is used) or pre-heats the water (if an air-to-water heat exchanger is used).
A small proportion of the extra efficiency of the condensing boiler is due to the cooling of the exhaust gases, but the majority of the energy recovered is from the condensation of the water vapour in the exhaust gases. This releases the latent heat of vaporisation of the water - 2260 kJ/kg (970btuh/pound) of condensate, i.e. the water vapour released whenever one burns fossil fuels.
The actual operating efficiency of a condensing boiler depends on the ambient air temperature and the relative humidity. If the incoming air is at 100% relative humidity, the condensing boiler will operate at its maximum efficiency, as it can condense all the extra water vapour introduced by combustion. As the relative humidity falls, so will the actual efficiency of the condensing boiler, because less of the water vapour produced can be recovered from the exhaust.