Hydration energy is the amount of heat released as an ionic substance is dissolved and its constituent ions are hydrated, or surrounded by water molecules. The polar water molecules adhere strongly to the ions, with the positive hydrogen ends orienting toward the negative ions and the negative oxygen ends orienting toward the positive ions. In general, the higher the hydration energy is, the more soluble the ionic substance is.
As with other chemical reactions where new compounds are formed or old compounds are broken down, thermodynamic advantage is a large part of whether a reaction takes place spontaneously or not. This means that, in general, any chemical reaction is more likely to occur if it results in a release in energy, as this tends to create a more stable state for the compounds involved. There are cases where this tendency to release energy, the enthalpy of a reaction, is overcome by an increase in entropy, making energetically neutral or even unfavorable reactions occur.
The most familiar example of hydration energy is the dissolution of salt in water. Sodium chloride is the most common salt that people encounter, and it is comprised of ionic crystals of sodium ions and chloride ions. When it is dissolved by water, the water warms up due to the hydration energy released.