Moving around, doing things, and maintaining your body temperature require energy. Sleep restores it. If your energy is not low enough you will be unable to sleep unless it is night. If you run out of energy you will black out. If you black out while swimming you will die.
Energy is limited by the other biostats. The others are measured on a scale from 0-100. Energy is also measured on a scale from 0-100 but may be limited to a lower maximum value if you are injured, dehydrated, hungry, hypothermic, etc. In order to keep your energy up it is very important that you maintain your other biostats.