"Cogeneration", also known as combined heat and power, uses a power station to simultaneously produce electricity and useful heat in the form of hot water or steam. Several fuel types can be used to achieve cogeneration, including natural gas. The result is a plant that is 80 to 90 percent efficient.
During the production of electricity, heat is produced. This usually dissipates back into the surrounding environment. Cogeneration, by contrast, captures some or all of this byproduct for heating purposes.
Cogeneration is not new. It has been practiced in the earliest installations of electricity generation. Plants or industry used the exhaust steam for processing heat. Apartments, offices, hotels, and stores produced their own power and used the steam for heat. These power operations continued the practice even after purchased utilities were available. Cogeneration is still used in pulp and paper mills, refineries, and chemical plants.
Con Edison in the United States uses cogeneration to distribute steam to 100,000 buildings in Manhattan. Recycled Energy Development is another major player in cogeneration within the United States.
The viability of combined heat and power depends on a good base load of operation, both in terms of onsite and near site demand. In cases where trigeneration (combined cooling, heat and power) exists, an absorption chiller is used to convert some of the heat for cooling. Cogeneration is most efficient when heat can be used on site or very close to it. Overall efficiency is reduced when heat must be transported over longer distances.
The energy efficiency attained by cogeneration systems is not limited to power plants and public utilities. "Micro cogeneration", or "microCHP", involves an installation in a house or small business that converts some energy to electricity in addition to heat. This allows more of the fuel to be utilized as useful energy, and can significantly reduce energy waste.