A spinning figure skater is an excellent example of angular momentum conservation. The skater starts spinning with her arms outstretched, and has a a rotational inertia of Ii and an initial angular velocity of ωi. When she moves her arms close to her body, she spins faster. Her moment of inertia decreases, so her angular velocity must increase to keep the angular momentum constant.
Conserving angular momentum:
Li = Lf
Ii ωi = If ωf
In this process, what happens to the skater's kinetic energy?
In this case the kinetic energy actually increases.
Ki = ½ Ii ωi2 = ½ (Ii ωi) ωi
Kf = ½ If ωf2 = ½ (If ωf) ωf
The figure skater does work on her arms and hands as she brings them closer to her body - that's where the extra energy comes from.