Originally Posted by chinamn

Yes you are right about gravitational potential E = mgh but you are forgetting kinetic potential, E = .5*m*v^2. Once you factor that in both equations, it shows that climbing up a hill requires an additional gravitational pontential energy.

As you mention performing both a the same power (watts) since climbing requires has both gravitional and kinetic potential energies and riding on flat ground only has the kinetic potential. Since some of your power would be disapated in gravitional and kinetic for climbinb, you will ride faster on level ground.