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Energon is a naturally-occurring element created by the interaction of the light of the sun with planetary bodies, which is, in essence, the source of all life in the universe.
It's... basically magic candy.
Powers and properties
Energon exists within planets in the form of a golden ore. In this unprocessed state, it is bursting with raw energy, and hence hazardous to normal Transformer life as it can potentially overload their bodies if they touch it. The only Transformers capable of safely handling energon are the Omnicons, their bodies mutated and immunized by years of mining it in the depths of space, and the Terrorcons, created by the alien Alpha Quintesson for the express purpose of gathering it.
The Omnicons are master energon sculptors, and can refine and shape energon into virtually anything, given time, including weapons and power-enhancing energon stars that can connect to the Autobots. Their refined energon usually takes on a red-hued metallic form, which is safe for Transformers to handle. In contrast, Terrorcons do not refine energon, but simply consume it orally, using their internal systems to shape it into energon stars of their own. These stars can also be used as power boosters for the Decepticons, but remain unsafe to touch.
In addition to solidified forms, energon can also be processed into a liquid to be used as a medicinal bath (like Radium), evaporated into a gas so that it can be channelled through pipelines, and weaponized as a plasmatic beam.