A general energy balance has been developed for insertion battery systems by using enthalpy potentials. This leads to a new calculation method for the heat‐generation rate. The same result is also derived from an alternative model based on local heat generation in an electrochemical cell. A new concept, the effective open‐circuit potential of an insertion battery, was proposed to characterize the open‐circuit state of the battery during galvanostatic discharge. Simulation results are presented for heat generation in a lithium cell under galvanostatic discharge. The analysis of these results focuses on effects of the shape of the open‐circuit potential and ohmic losses in the electrolyte in the porous cathode. It is shown that a single reaction may look like two reactions due to the presence of two plateaus in the open‐circuit potential.