Transcritical Rankine cycles using refrigerant R32 (CH2F2) and carbon dioxide (CO2) as the working fluids are studied for the conversion of low-grade heat into mechanical power. Compared to CO2, R32 has higher thermal conductivity and condenses easily. The energy and exergy analyses of the cycle with these two fluids shows that the R32-based transcritical Rankine cycle can achieve 12.6-18.7% higher thermal efficiency and works at much lower pressures. An analysis of the exergy destruction and losses as well as the exergy efficiency optimization of the transcritical Rankine cycle is conducted. Based on the analysis, an "ideal" working fluid for the transcritical Rankine cycle is conceived, and ideas are proposed to design working fluids that can approach the properties of an "ideal" working fluid. (C) 2011 Elsevier Ltd. All rights reserved.