water/steam injection into the intake isn't all that effective. Problems are that will can quench the combustion flame. i.e. cool the flame temp and hence reduce pressure. On the other hand it could also increase the pressure (if there were enough heat generated (high compression ratios)). The will be some optimum amount of water depending one the engine.
Also injecting water/steam into the intake increases pumping losses. This is the energy required to compress the warm/hot steam air mixture. We would want to avoid this to maximize efficiency.
The otto cycle efficiency is depends on maximum and minimum pressure and compression ratio. hence to improve the efficiency we seek to raise the maximum pressure. Superheated steam can generate higher pressures from the combustion temperatures of fuels than hot air.
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