Why does formation of bond releases energy and where does that energy come from?
It's a matter of perspective. You say you understand why bond breaking requires energy. In other words:
$$\ce{A2 + energy -&gt; 2A}$$
But consider the reverse reaction:
$$\ce{2A -&gt; A2 + energy}$$
This is also valid and can be understood in the following way: Bonds stabilize the electrons. In the unbound or atomic state, the electrons have a bit more energy. You can consider that atoms have some potential energy, like a ball on a hill. By forming a bond, the atoms &quot;go down the hill&quot; into a more stable state and thus lose this potential energy. This energy must go somewhere, and it is thus released in one form or another (heat, light, etc.) To break the bond is to push the atoms &quot;up the hill&quot; again, which requires energy.