Due to global warming & rising energy cost, it has become the need of society to develop new techniques for pollutant emission & reduction of fuel consumption. This paper provides a comprehensive review of recent research on the energy-saving technology for minimizing the specific fuel consumption up to a certain level. The development, application and performance of hybrid hydraulic excavation system were analysed. These developed model system can be optimized by simulation techniques to improving the energy efficiency and decreasing the fuel consumption. A specific research activity has been initiated in this field to define a non-linear mathematical model and a dynamic analysis technique for a system in which hydraulic system is blended with a linkage system. So that it can evaluate the fuel consumption of a hydraulic excavator during the various operations occurred.