In psychodynamics, psychic energy or "psychological energy" refers, generally, to the energy of the mind, mental processes, or psychological phenomena; energy tends to be conceptualized as some type of flow in the psychological system, governed by the principle of conservation of energy, and or the first law of thermodynamics.
In 1838 to 1842, German physicians Ernst Brücke, Herman Helmholtz, and Emil Du Bois-Reymond, who during the years 1838-42, worked in the laboratory of the German physiologist Johannes Muller, who adherence to the principle of vitalism, a doctrine that the functions of a living organism are due to a vital principle distinct from physiochemical forces. In reaction to this, the three of them, in the words of Du Bois-Reymond, formulated a desire to validate the basic truth that: 
“In an organism no other forces have effect than the common physio-chemical ones.”
This force or kraft, as it is called in German, soon later became synonymous with the newly forming concept of energy.
In 1895, Austrian psychologist Sigmund Freud, Brücke’s medical school student, in his "A Project for Scientific Psychology" began theorizing about bound energy and free energy in psychological terms.
In 1898, Russian psychologist Nicolas von Grot stated: 
“The concept of psychic energy is as much justified in science as that of physical energy, and psychic energy has just as many quantitative measurements and different forms as has physical energy.”
Into the early 20th century, Freud’s protégé Swiss psychologist Carl Jung began discussing and using psychic energy, in his theories.
In 1976, American psychiatrist Robert Galatzer-Levy, in his article "Psychic Energy: A Historical Perspective", summarized that: 
“Much criticism of the concept of psychic energy is based on its apparent failure to live up to the paradigm on which it is modeled, the concept of energy conservation in physics.”(add discussion)
1. Helmholtz, Hermann von (biography). Encyclopedia Britannica Deluxe Edition (2002), CD-ROM.
2. (a) Von Grot, Nicolas. (1898). “Die Begriffe der Seele und der psychischen Energie in der Psychologie”, Archiv fur systematische Philosophie, IV.
(b) Jung, Carl. (1928). “On Psychic Energy”, in On the Nature of the Psyche (1960). Princeton University Press.
(c) Bishop, Paul. (1999). Jung in Contexts (pg. xxiii). Routledge.
3. Galatzer-Levy, Robert M. (1976). “Psychic Energy: A Historical Perspective”, The Annual of Psychoanalysis, 4: 41-61.
● Schwartz, Nathan J. (1969). Entropy, Negentropy, and the Psyche: an Inquiry into the Structure of Psychic Energy. Publisher: s.n.
● Hall, Calvin S. and Nordby, Vernon J. (1973). A Primer in Jungian Psychology (section II: Psychic Energy, pgs. 59-60). New York: Meridian Books.
● Csíkszentmihályi, Mihály. (1990). Flow – the Psychology of Optimal Experience (section: Attention as Psychic Energy, pgs. 30-33). Harper Perennial.