Theoretical researches have established that the energy dynamics of a mature tropical cyclone may be idealized to be very similar to a theoretical Carnot heat engine. Assuming the dissipative heating of the atmospheric boundary layer and the net production of mechanical energy in the cyclone dominate the energy budget of the storm, the potential maximum wind speed of the cyclone can be approximated as a function of the air–sea temperature difference (Ts − T0) and specific enthalpy (k0*−k) difference: |Vmax|2≈CkCDTs−T0T0(k0*−k). Although this theory gives a straighforward estimate of maximum tropical cyclone intensity, studies found that few real storms achieve this theoretical maximum estimated using climatological atmospheric conditions and sea surface temperatures. The discrepancies were attributed to a lack of knowledge of the values of the drag coefficient (CD) and surface exchange coefficient for enthalpy (Ck), and on insufficient upper ocean thermal measurements under hurricanes. Recent observational and numerical studies have unearthed another possible factor for these discrepancies by showing that the energy flux into surface gravity waves under extreme wind conditions can be an order of magnitude greater than formerly believed, and thus may play an important role in the energy budget of tropical cyclones. In this study, numerical experiments are performed to investigate the effect of surface gravity waves under a range of idealized tropical cyclone winds. The wave fields are simulated using the WAVEWATCH III model. Our results demonstrate that by considering the energy flux to surface gravity waves, the potential maximum wind speed can be reduced by up to 12% and this ratio varies with the storm size, intensity, and translation speed.