water/meth injection cools your combustion temps and intake charge. Methanol has a high octain and burns cooler than fuel has a great cooling effect as well. Water has a very slow evaporation, the system soaks up alot of the heat prior to going into the engine, this colder temp leads to a higher safety margin, alows you to run more boost and timing and the end result is more power.
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Water Injection, Methanol Injection systems | Coolingmist
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