A free energy diagram is probably easiest to understand by taking a look at one (see diagram) as we explain the key features.

The y-axis measures the relative free energy of the chemical species we’re dealing with, while the x-axis describes the reaction coordinate (it’s common that going left to right is forward progress in the reaction, but this isn’t necessarily the case 100% of the time). On the left we have our reactants. In general there may be any number of reactants, and here we’ve just denoted two species, A and B. The “hill” in the middle is the energetic barrier to the chemical reaction, and the quantity Ea denotes the height of this energy barrier. The quantity Ea is commonly referred to as the activation energy for the reaction. On the right-hand side of the diagram we have our products. Again, there can be any number of products, and here we’ve denoted them C and D. Finally we have the quantity G, which describes the change in Gibbs free energy associated with the reaction. The fact that the reactants are higher in free energy than the products tells us that this particular example is a spontaneous reaction. If the reactants were lower in free energy than the products, the reaction would not be spontaneous.