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If you imagine an idealized light source, where photons come into existence out of nowhere, then there is no conservation of energy (energy is being created). But in a more realistic model where photons are emitted as a result of electron excitation, say, energy is conserved because the electron recoils when firing off the photon, so the extra observed energy of a blueshifted photon can be found in the extra kinetic energy of the electron as observed in that same frame of reference.



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