Cogeneration, also known as combined heat and power (CHP), is the simultaneous production of electricity and useful heat from a single primary energy source. Cogeneration is a more efficient use of fuel or heat because otherwise-wasted heat from electricity generation is captured and used for heating or cooling purposes. The most widely used cogeneration technologies involve the combustion of fuels such as natural gas, diesel, biogas, biomass, vegetable oil, or bio-methane.

Cogeneration has several benefits, including:

• Higher efficiency: Cogeneration power plants generally operate at between 50 to 70% higher efficiency rates than traditional power plants.

• Lower emissions: Cogeneration saves every year 200 million tonnes of CO2 in Europe thanks to being very efficient. This equals the total emissions of 42.5 million passenger cars or 2.6 million trucks.

• Reduced energy costs: Users of cogeneration benefit from higher efficiencies and therefore need less fuel to cover their heating and electricity demand.

• Supporting renewable energy: Cogeneration can run on any renewable fuel and is the most cost-effective way of using renewable fuels. Currently, 27% of fuels used in cogeneration in Europe are renewable, mainly biomass and biogas.

• Empowered businesses and citizens: Cogeneration comes in all sizes, from 1kW to nearly 1GW. It is fit to supply heat and electricity to all types of users, from a single household to a large industrial complex or entire town.

• Enhanced energy system resilience: Cogeneration can generate the exact amount of electricity and heat needed at a certain time in a certain place. This brings flexibility and resilience to an energy system which has to cope with a growing number of intermittent renewables such as solar and wind power.

• Reduced transmission and distribution costs: Cogeneration generates electricity and heat at the spot. Users of cogeneration rely less on electricity from the grid, reducing transmission and distribution costs.

Cogeneration is commonly used in district heating systems of cities, central heating systems of larger buildings (e.g. hospitals, hotels, prisons), and in the industry in thermal production processes for process water, cooling, steam production, or CO2 fertilization. Cogeneration is still common in pulp and paper mills, refineries, and chemical plants.