We develop the energy budget equation of the coupled Navier-Stokes-Cahn-Hilliard (NSCH) system. We use the NSCH equations to model the dynamics of liquid droplets in a liquid continuum. Buoyancy effects are accounted for through the Boussinesq assumption. We physically interpret each quantity involved in the energy exchange to gain further insight into the model. Highly resolved simulations involving density-driven flows and the merging of droplets allow us to analyse these energy budgets. In particular, we focus on the energy exchanges when droplets merge, and describe flow features relevant to this phenomenon. By comparing our numerical simulations to analytical predictions and experimental results available in the literature, we conclude that modelling droplet dynamics within the framework of NSCH equations is a sensible approach worthy of further research. © 2016 Cambridge University Press.