Correct Answer - Option 2 : loss of exergy is directly proportional to rate of entropy generation

__Explanation:__

**Exergy (or) Available Energy: **

The maximum portion of energy that could be converted into useful work by ideal processes that reduce the system to a dead state(a state in equilibrium with the earth and its atmosphere).

**W**_{max }= I + W_{act}

where I = Irreversibility (loss of available energy)

According to the Gouy-Stodola theorem, the loss of available energy (Irreversibility) is given by **To(ΔS)gen**

where To is the atmospheric temperature and (ΔS)gen is the entropy generation due to the heat transfer from one reservoir to another reservoir.

Wmax = To(ΔS)gen + Wact

**∴ Loss of exergy is directly proportional to the rate of entropy generation. **