In the first law of energy, energy can be changed from one form into another but it cannot be created or destroyed. There are 4 basic types of energy that can be converted. Chemical energy refers to energy associated with bonds within a molecule. Electrical energy refers to energy associated with the flow of electrons. Mechanical energy refers to energy associated with moving objects whether they are machines of parts of cells.
Radiant energy refers to energy associated with flow of photons.
Or as your text puts it if there is no energy entering or leaving the system, the potential energy of the final state will always be less than the potential energy of the initial state. Things tend toward disorder spontaneously. If the two blocks are placed in contact, the hot block becomes cooler while the cold one becomes warmer till they are both the same temperature. Something other than changes in heat content are involved. That other thing is entropy.