  We investigate the thermodynamics of close encounters between stellar mass
black holes (BHs) in the gaseous discs of active galactic nuclei (AGN), during
which binary black holes (BBHs) may form. We consider a suite of 2D viscous
hydrodynamical simulations within a shearing box prescription using the
Eulerian grid code Athena++. We study formation scenarios where the fluid is
either an isothermal gas or an adiabatic mixture of gas and radiation in local
thermal equilibrium. We include the effects of viscous and shock heating, as
well as optically thick cooling. We co-evolve the embedded BHs with the gas,
keeping track of the energetic dissipation and torquing of the BBH by gas and
inertial forces. We find that compared to the isothermal case, the minidiscs
formed around each BH are significantly hotter and more diffuse, though BBH
formation is still efficient. We observe massive blast waves arising from
collisions between the radiative minidiscs during both the initial close
encounter, and subsequent periapsis periods for successfully bound BBHs. These
"disc novae" have a profound effect, depleting the BBH Hill sphere of gas and
injecting energy into the surrounding medium. In analysing the thermal emission
from these events, we observe periodic peaks in local luminosity associated
with close encounters/periapses, with emission peaking in the optical/near-IR.
In the AGN outskirts, these outbursts can reach 4% of the AGN luminosity in the
IR band, with flares rising over 0.5-1year. Collisions in different disc
regions, or when treated in 3D with magnetism, may produce more prominent
flares.
