In a combined heat and power plant (also known as a cogeneration plant), waste heat produced is used simultaneously to generate more electricity and heat for industrial and domestic heating.
Ordinary fossil fuel power plants that burn coal, petroleum, or natural gas do not convert all of their heat into electricity. In most fossil fuel power plants, more than half is lost as waste heat.
In a combined heat and power plant heat that would be wasted is used to develop more electrical power. Some of the heat may also be distributed to houses, hospitals or schools.
A combined heat and power plant can reach efficiency of up to 89 per cent, compared with 55 per cent for the best conventional plants. This means that less fuel needs to be consumed to produce the same amount of useful energy.