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The energy assessment must be made through the energy quantity as well as the quality. But the usual energy analysis evaluates the energy generally on its quantity only. However, the exergy analysis assesses the energy on quantity as well as the quality. The aim of the exergy analysis is to identify the magnitudes and the locations of real energy losses, in order to improve the existing systems, processes or components. The present paper deals with an exergy analysis performed on an operating 50MWe unit of lignite fired steam power plant at Thermal Power Station-I, Neyveli Lignite Corporation Limited, Neyveli, Tamil Nadu, India. The exergy losses occurred in the various subsystems of the plant and their components have been calculated using the mass, energy and exergy balance equations. The distribution of the exergy losses in several plant components during the real time plant running conditions has been assessed to locate the process irreversibility. The First law efficiency (energy efficiency) and the Second law efficiency (exergy efficiency) of the plant have also been calculated. The comparison between the energy losses and the exergy losses of the individual components of the plant shows that the maximum energy losses of 39% occur in the condenser, whereas the maximum exergy losses of 42.73% occur in the combustor. The real losses of energy which has a scope for the improvement are given as maximum exergy losses that occurred in the combustor.