This paper presents the results of a simulation study regarding the energy consumption of a load-sensing excavator hydraulic system and discusses the possible energy savings by eliminating the directional control valves. The energy consumption of the excavator hydraulic system has been studied for typical working cycles. For this purpose a coupled multi-body dynamics and hydraulic system model was developed in the Matlab Simulink environment, including a precise measurement-based loss model of the variable displacement pump. Power transmission and dissipation was calculated for each component and subsystem, including pumps, motors, valves, cylinders, transmission lines, and others. The simulation results show the amount of dissipated energy, indicating the major loss sources during various operations. Furthermore, the potential recoverable energy in the cycle is calculated, highlighting the prospective advantages of equipping the existing machine with new pump-controlled actuator technology.