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The laws of thermodynamics are not a theory, which is why they are called laws.
I think the idea with running hotter is that less heat from combustion is absorbed by the engine since the temperature differential between combusted hot gas and engine is reduced. I dunno, I'm no expert in this area.
Still, a 20% increase in power for a given amount of fuel doesn't make sense. It doesn't pass the "reasonable" test.
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