Bipropellant-powered hydraulic free piston engine (BHFPE), as a new type of HFPE, takes advantage of bipropellant in place of conventional fossil fuel, and adopts a catalytic ignition instead of the conventional spark or compression ignition. In this paper, the operational principle and working process of a BHFPE are described firstly, then the chemical formula and molar mass as well as the heating value of the bipropellant i.e. kerosene/HTP combination are dealt with respectively. Thereafter analysis on the internal energy-flow i.e. energy input, transfer, dissipation and output, during a working cycle of the BHFPE are analyzed. Additionally the operating parameters such as working efficiency, maximum speed of the free piston assembly (FPA) and the output hydraulic energy are derived.