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For those people saying that ethanol fuel adversely affects c5 fuel systems, could you please provide some evidence of damage as a result of using ethanol fuel?
You need to start reading up on it! I We don't keep a briefing book ready for you with a bunch of articles discussing the issue.
No, it has less energy. But it does have a higher octane rating.
E85 has less BTU per unit mass then pump gasoline, so it takes more E85 to perform the same amount of work than pump gasoline. This is shown in the different stoichiometric ratios of the two different fuels. That's why your MPG rating is lower when using E85 vs gasoline (even E10 or E15 pump gasoline).
E85 has a much higher octane rating than pump gasoline. So you can run additional ignition timing advance (before preignition occurs) than with pump gasoline, which increases the peak cylinder pressure and produces more torque at any given RPM. That's why you can make power when using E85 vs pump gasoline.