Cogeneration, also called combined heat and power (CHP), is a method that uses a machine or power plant to create electricity and useful heat at the same time. This process is more efficient because heat that would usually be wasted during electricity production is used for another purpose. CHP plants capture this wasted heat and use it for heating, a process also known as combined heat and power district heating. Small CHP plants are an example of decentralized energy, which means energy is produced closer to where it is used. Heat at moderate temperatures (100–180 °C or 212–356 °F) can also be used in special cooling systems called absorption refrigerators.

High-temperature heat is first used to power a gas or steam turbine generator. The leftover low-temperature heat is then used for heating water or buildings. At smaller sizes (usually under 1 megawatt), a gas engine or diesel engine may be used instead. Cogeneration is often used in geothermal power plants because they produce heat that is easier to use, though sometimes special systems called binary cycles are needed to improve efficiency. Cogeneration is less common in nuclear power plants because nuclear plants are often located far from people due to safety concerns, and district heating is less effective in areas with fewer people because of energy loss during transport.

Cogeneration was used in some of the earliest electrical generation systems. Before large power plants provided electricity to many areas, industries and large buildings like offices, hotels, and stores generated their own power and used leftover steam for heating. Because early electricity was expensive, these systems continued for many years even after electricity became widely available.

Overview

Many industries, such as chemical plants, oil refineries, and paper mills, need large amounts of heat for operations like chemical reactions, distillation, and drying. This heat is often provided as steam. Steam can be generated at low pressures directly for heating or at high pressures to pass through a turbine first to create electricity. In the turbine, steam pressure and temperature decrease as its energy is converted into work. The lower-pressure steam that exits the turbine can still be used for heating.

At thermal power stations, steam turbines are usually designed to receive high-pressure steam. This steam exits the turbine into a condenser, where it is cooled to a temperature just above room temperature and a very low pressure (called a condensing turbine). At this point, the steam has very little remaining energy. In contrast, turbines used for cogeneration (producing both electricity and heat) are designed to extract some steam at lower pressures after it passes through part of the turbine. The remaining steam continues through the turbine to the condenser. The extracted steam is then used for heating. However, using this steam for heating reduces the amount of electricity the turbine can produce. Some turbines are also designed to release steam at a higher pressure (non-condensing) for direct heating. The steam used for heating still contains significant energy that could be used to generate electricity, which creates an opportunity cost.

In a paper mill, a typical power generation turbine might extract steam at pressures of 160 and 60 psi (1.10 and 0.41 MPa). The final pressure of the steam released from the turbine might be 60 psi (0.41 MPa). These pressures are often customized for each facility. However, producing steam at lower pressures for heating instead of high enough pressure to generate electricity also has an opportunity cost. High-pressure equipment, such as boilers, turbines, and generators, is expensive and typically used continuously, which limits self-generated power to large-scale operations.

A combined cycle system uses multiple thermodynamic processes to generate electricity. For example, heat from a power plant’s exhaust can be used to heat water for a boiler, which then provides heat for buildings. A modern system might use a gas turbine powered by natural gas. The exhaust from this turbine heats water to produce steam, and the steam’s condensate is used for heating. Cogeneration plants using combined cycles can achieve thermal efficiencies above 80%.

The effectiveness of combined heat and power (CHP) systems, especially in smaller plants, depends on having a steady demand for both electricity and heat. Often, the need for heat and electricity does not perfectly match. A CHP plant can either prioritize meeting heat needs or operate as a power plant with some heat use, which is less efficient. Efficiency improves when trigeneration is possible, where heat is also used to provide cooling through an absorption chiller.

CHP systems are most efficient when heat is used on-site or very close to the source. Transporting heat over long distances requires expensive, insulated pipes and is less efficient than transmitting electricity through wires over long distances.

A car engine acts as a CHP plant in winter when the heat it produces is used to warm the vehicle’s interior. This example shows that CHP systems depend on having a nearby use for the heat they generate.

Thermally enhanced oil recovery (TEOR) plants often produce extra electricity. After generating power, they inject leftover steam into oil wells to help extract heavy oil more easily.

Cogeneration plants are often used in city district heating systems, large buildings like hospitals and hotels, and in industrial processes for tasks like producing steam, cooling, or CO₂ fertilization.

Trigeneration, or combined cooling, heat, and power (CCHP), involves generating electricity, heat, and cooling at the same time using fuel or solar heat. Unlike cogeneration, which only produces electricity and heat, trigeneration uses waste heat for both heating and cooling, often through an absorption refrigerator. These systems can be more efficient than traditional power plants or cogeneration systems. In the United States, trigeneration in buildings is called building cooling, heating, and power. Heating and cooling can happen at the same time or separately, depending on the system and needs.

Types of plants

Topping cycle plants mainly generate electricity using steam turbines. Partly expanded steam is then cooled in a heating condenser at a temperature suitable for uses like district heating or water desalination.

Bottoming cycle plants produce high-temperature heat for industrial processes. A waste heat recovery boiler then sends this heat to an electrical plant. Bottoming cycle plants are used only in industrial processes that need very high temperatures, such as furnaces for glass and metal manufacturing. This makes them less common.

Large cogeneration systems provide heating water and power for an industrial site or an entire town. Common CHP plant types include:

• Gas turbine CHP plants that use heat from the exhaust gas of gas turbines. Natural gas is typically the fuel used.
• Gas engine CHP plants use a reciprocating gas engine, which is more efficient than a gas turbine for systems up to about 5 MW. These plants use natural gas as fuel and are made as complete units that can be installed in a building or outside with simple connections to gas, electricity, and heating systems.
• Biofuel engine CHP plants use a modified gas or diesel engine, depending on the type of biofuel. These plants are similar to gas engine CHP plants but reduce fossil fuel use and carbon emissions. They are also made as complete units with simple connections to gas, electricity, and heating systems. A variation is the wood gasifier CHP plant, where wood pellets or chips are turned into gas in a high-temperature, oxygen-free environment, and the gas powers an engine.
• Combined cycle power plants adapted for CHP.
• Molten-carbonate fuel cells and solid oxide fuel cells produce hot exhaust, which is useful for heating.
• Steam turbine CHP plants that use a heating system as the steam condenser for the turbine.
• Nuclear power plants can be modified to use steam from turbines for heating. At 95°C, about 10 MW of heat can be produced for every 1 MW of electricity lost. At 130°C, about 7 MW of heat can be produced for every 1 MW of electricity lost. A Czech research team proposed a "Teplator" system that uses heat from spent fuel rods for residential heating.

Smaller cogeneration units may use a reciprocating engine or Stirling engine. Heat is taken from the exhaust and radiator. These systems are popular for small sizes because small gas or diesel engines are less expensive than small steam-electric plants.

Some cogeneration plants use biomass, industrial waste, or municipal solid waste (see incineration). Others use waste gas, such as gas from animal waste, landfills, coal mines, sewage, or industrial waste.

Some cogeneration plants combine gas and solar photovoltaic generation to improve performance. These hybrid systems can be used in buildings or homes.

Micro combined heat and power, or "Micro CHP," is a type of distributed energy resource (DER). These systems are usually less than 5 kW in homes or small businesses. Instead of burning fuel only for heating, some energy is converted to electricity, which can be used in the home or sold back to the power grid.

Delta-ee consultants reported in 2013 that fuel cell micro-CHP systems sold more than conventional systems in 2012, with 20,000 units sold in Japan as part of the Ene Farm project. These units have a lifetime of about 60,000 hours. For fuel cells that shut down at night, this is roughly 10 to 15 years. The cost before installation was $22,600 in 2013, and a subsidy was available for 50,000 units.

MicroCHP systems use five technologies: microturbines, internal combustion engines, Stirling engines, closed-cycle steam engines, and fuel cells. A 2008 study suggested that Stirling engine-based MicroCHP is the most cost-effective for reducing carbon emissions. A 2013 UK report noted that MicroCHP is the most cost-effective way to use gas for energy at home. Improvements in engine technology are also increasing efficiency in CHP plants, especially in biogas systems. Both MiniCHP and CHP can reduce emissions, making them valuable for reducing CO₂ from buildings, where CHP can save over 14% of emissions. The University of Cambridge developed a cost-effective steam engine MicroCHP prototype in 2017, which could be competitive in the future. Some homes now use fuel cell micro-CHP systems that run on hydrogen, natural gas, or LPG. When using natural gas, it is first converted to hydrogen through a process called steam reforming, which still produces CO₂.

Another example of MicroCHP is a natural gas or propane-powered condensing furnace that produces electricity and heat from a single fuel source. This system uses a secondary heat exchanger to recover heat from combustion products and water vapor. Instead of a chimney, it uses a water drain and vent.

A plant that produces electricity, heat, and cold is called a trigeneration or polygeneration plant. Cogeneration systems connected to absorption or adsorption chillers use waste heat for cooling.

In the United States, Consolidated Edison sends 66 billion kilograms of 350°F (177°C) steam yearly through seven cogeneration plants to 100,000 buildings in Manhattan, the largest steam district in the country. The peak steam delivery is 10 million pounds per hour (about 2.5 GW).

Cogeneration is still common in pulp and paper mills, refineries, and chemical plants. In industrial cogeneration, heat is often recovered at high temperatures (above 100°C) for processes like steam production or drying. This is more valuable than low-grade waste heat but slightly reduces power generation. Sustainability efforts have made industrial CHP more attractive because it reduces carbon emissions compared to producing steam or electricity separately.

Smaller industrial cogeneration units have an output of 5–25 MW and are useful for remote areas to reduce emissions.

Industrial cogeneration plants usually operate at lower boiler pressures than utility plants. Reasons for this include:

Cogeneration using biomass

Biomass is plant or animal material that can be used again to make heat or electricity, like sugarcane, vegetable oils, wood, organic waste, and leftovers from food or farming industries. Brazil is now a global leader in using biomass to create energy.

The sugar and alcohol industry is becoming more important in using biomass for energy. They mainly use sugarcane bagasse as fuel for heat and electricity.

In sugarcane processing, a method called cogeneration uses leftover bagasse from refining. This material is burned to make steam. Some of the steam goes through a turbine connected to a generator, which makes electricity.

In Brazil, using cogeneration in sugarcane industries has become more common in recent years. This method allows sugarcane industries to provide the electricity they need to run their operations and also create extra electricity that can be sold.

Compared to power plants that use fossil fuels like natural gas, energy from sugarcane bagasse has environmental benefits because it produces less carbon dioxide.

Using sugarcane bagasse for cogeneration is also more efficient than using fossil fuels. In traditional power plants, some heat is wasted, but in cogeneration, this heat can be used in production processes, making the whole process more efficient.

In sugarcane farming, potassium sources that contain high levels of chlorine, such as potassium chloride (KCl), are often used. When large amounts of KCl are applied, sugarcane takes in large amounts of chlorine. This can cause harmful substances like dioxins and methyl chloride to be released when sugarcane bagasse is burned. Dioxins are very dangerous and can cause cancer. Methyl chloride harms the ozone layer.

Comparison with a heat pump

A heat pump can be compared to a CHP unit in the following way. If thermal energy is needed and the exhaust steam from a turbo-generator must be taken at a higher temperature than the system can produce electricity efficiently, the loss of electrical power is similar to using a heat pump to provide the same heat. This heat pump would use electrical power from a generator operating at a lower temperature but higher efficiency. Typically, for every unit of electrical power lost, about 6 units of heat are produced at around 90°C (194°F). This means the CHP system has an effective Coefficient of Performance (COP) of 6 compared to a heat pump. However, for heat pumps operated remotely, electrical losses in the power grid must be considered. These losses are about 6% on average, but they increase significantly during peak times due to the way electricity is transmitted. If many heat pumps are used citywide, the power grid may become overloaded unless it is strengthened.

It is also possible to combine a heat-driven process with a heat pump. When heat demand increases, more electricity is generated to power the heat pump, and the waste heat from this process can be used to warm a heating fluid.

The efficiency of heat pumps depends on the temperature difference between the hot and cold ends. Efficiency improves when this difference is smaller. This means that even low-grade waste heat, which might not be useful for home heating alone, can be effectively used with heat pumps. For example, a large reservoir of cooling water at 15°C (59°F) can greatly improve the efficiency of heat pumps compared to air-source heat pumps operating in very cold air, such as during a −20°C (−4°F) night. In the summer, when there is demand for both air conditioning and warm water, the same water can serve as a place to release waste heat from air conditioners and as a source of heat for heat pumps providing warm water. These ideas are sometimes referred to as "cold district heating," which uses a heat source at a much lower temperature than typical district heating systems.

Distributed generation

Most industrial countries produce most of their electricity in large, central power plants that can generate a lot of energy. These plants are efficient because they can make electricity at lower costs when producing large amounts, but they may need to send electricity over long distances, which can cause some energy to be lost during transport. Systems that produce both electricity and heat (cogeneration) or electricity, heat, and cooling (trigeneration) are limited by how much energy is needed locally. Sometimes, these systems must reduce the amount of heat or cooling they provide to match the local demand. An example of a system that uses cogeneration and trigeneration in a large city is the New York City steam system.

Thermal efficiency

All heat engines have maximum efficiency limits set by the Carnot cycle or similar cycles like Rankine or Brayton. In steam turbine power plants, much of the energy loss happens because the heat from steam turning back into water is not fully used when steam is released into a condenser. This steam is usually at very low pressure and slightly warmer than the cooling water used in the condenser. In systems that use both electricity and heat (called cogeneration), the steam exits the turbine at a higher temperature and can be used for heating buildings, industrial processes, or cooling through an absorption chiller. Most of the usable heat comes from the energy released when steam turns back into water.

Thermal efficiency in a cogeneration system is calculated by dividing the total work output (electricity and heat) by the total heat input. This is shown as:
Thermal efficiency = (Electrical power output + Heat output) / Total heat input

• Thermal efficiency (ηₜₕ) = The ratio of useful energy output to total energy input.
• Work output (Wout) = Total electricity and heat produced.
• Heat input (Qin) = Total heat energy supplied to the system.

In systems that also provide cooling (called trigeneration), the formula includes cooling output:
Thermal efficiency = (Electrical power output + Heat output + Cooling output) / Total heat input

Energy distribution in typical cogeneration systems is as follows:
– Electricity = 45%
– Heat and cooling = 40%
– Heat lost = 13%
– Electrical losses = 2%

Traditional power plants using coal or nuclear energy convert about 33–45% of their heat into electricity. Brayton cycle plants can reach up to 60% efficiency. In traditional plants, about 10–15% of heat is lost through the boiler, and the rest is released as low-temperature waste heat from turbines. This heat is usually sent to the environment through cooling water. However, using steam for cogeneration requires releasing it at a lower temperature, which slightly reduces electricity production.

For cogeneration to work well, the location of power generation and heat use must be close (usually less than 2 kilometers apart). Although small power generators may be less efficient than large plants, using their waste heat for local heating and cooling can make the overall fuel use as high as 80%. This improves both cost savings and environmental benefits.

Costs

For a gas-fired power plant, the total cost to build each kilowatt of electricity is about £400 per kilowatt (about US$577). This cost is similar to the cost of building large power stations.

History

The European Union has included cogeneration in its energy plans through the CHP Directive. In September 2008, during a meeting of the European Parliament's Urban Lodgment Intergroup, Energy Commissioner Andris Piebalgs said, "security of supply really starts with energy efficiency." Energy efficiency and cogeneration are mentioned in the introduction of the European Union's Cogeneration Directive 2004/08/EC. This directive aims to support cogeneration and create a way to measure cogeneration abilities in each country. Over the years, the development of cogeneration has varied greatly and has been influenced mainly by conditions in individual countries.

The European Union produces about 11–12% of its electricity using cogeneration. However, there are large differences between member countries, with energy savings ranging from 2% to 60%. Europe has three countries with the highest levels of cogeneration use in the world: Denmark, the Netherlands, and Finland. In 2012, 81.80% of the 28.46 TWh of electricity produced by conventional thermal power plants in Finland came from cogeneration.

Other European countries are also working to improve energy efficiency. Germany reported that over 50% of its total electricity needs could be met through cogeneration. Germany set a goal to double its electricity cogeneration from 12.5% to 25% by 2020 and passed laws to support this. In 2020, Germany updated its Cogeneration Act (KWKG) to help shift to flexible, low-carbon CHP systems to meet climate goals for 2030. The UK also supports combined heat and power. Initially aiming to get 15% of government electricity from CHP by 2010, the UK has since included CHP in its "Clean Growth Strategy" to reach net-zero emissions by 2050, focusing on industrial areas and heat networks.

According to the IEA 2008 study on cogeneration expansion in G8 countries, increasing cogeneration in France, Germany, Italy, and the UK alone would double the current energy savings by 2030. This would increase Europe's energy savings from 155.69 TWh to 465 TWh in 2030. It would also increase each country's total cogenerated electricity by 16% to 29% by 2030. Recent EU policies, including the 2023 recast of the Energy Efficiency Directive (2023/1791), have made stricter rules for "high-efficiency cogeneration" to match the European Green Deal, emphasizing renewable energy over fossil fuels.

Organizations like COGEN Europe help governments with their CHP efforts by providing the latest updates on energy policies in Europe. COGEN is the main group in Europe that represents the interests of the cogeneration industry.

The European public–private partnership Fuel Cells and Hydrogen Joint Undertaking Seventh Framework Programme project ene.field installed over 1,000 residential fuel cell Combined Heat and Power (micro-CHP) systems in 12 countries by 2017. After this success, the PACE project (Pathway to a Competitive European Fuel Cell micro-CHP Market) was started, and by 2022, it had installed over 2,800 next-generation fuel cell units in European homes, reducing carbon emissions in residential areas.

In the United Kingdom, the Combined Heat and Power Quality Assurance scheme regulates the production of heat and power together. Introduced in 1996, it defines "Good Quality CHP" by calculating energy savings compared to separate heat and electricity generation. Meeting the standards of this scheme is required for cogeneration systems to qualify for government subsidies and tax benefits.

Perhaps the first modern use of energy recycling was by Thomas Edison. His 1882 Pearl Street Station, the first commercial power plant, was a combined heat and power plant that produced both electricity and thermal energy. It used waste heat to warm nearby buildings, achieving about 50% efficiency.

By the early 1900s, rules were created to promote rural electrification through centralized power plants managed by regional utilities. These rules helped bring electricity to rural areas but also discouraged smaller, decentralized power generation like cogeneration.

By 1978, Congress recognized that efficiency at central power plants had not improved and passed the Public Utility Regulatory Policies Act (PURPA) to encourage better efficiency. This law required utilities to buy power from other producers. Cogeneration plants then produced about 8% of all energy in the United States. However, the law left enforcement to individual states, so little progress was made in many areas.

The United States Department of Energy has a goal of making CHP provide 20% of the nation's electricity by 2030. Eight Clean Energy Application Centers have been created across the country. Their goal is to develop the knowledge and education needed to promote clean energy technologies like combined heat and power, waste heat recovery, and district energy as practical energy options and reduce any risks people might have about using them. These centers focus on helping end users, policymakers, utilities, and industry leaders learn about and use these technologies.

High electricity prices in New England and the Middle Atlantic regions of the United States make these areas the most suitable for cogeneration.

Applications in power generation systems

The following types of conventional power plants can be changed into systems that provide cooling, heating, and electricity together:

• Coal
• Microturbine
• Natural gas
• Oil
• Small gas turbine

• Nuclear power
• Geothermal power / geothermal heating
• Radioisotope thermoelectric generators can also act as heater units, which helps improve their low efficiency (less than 10%) in turning heat into electricity

• Solar thermal
• Biomass
• Hydrogen fuel cells that use green hydrogen
• Compressors or turboexpanders, like those used in compressed air energy storage