Cogeneration (also combined heat and power, CHP) is the use of a heat engine or a power station to simultaneously generate both electricity and useful heat.  All thermal power plants emit a certain amount of heat during electricity generation. This can be released into the natural environment through cooling towers, flue gas, or by other means. Thermal power plants (including those that use fissile elements or burn coal, petroleum, or natural gas), and heat engines in general, do not convert all of their thermal energy into electricity. In most heat engines, a bit more than half is lost as excess heat. By capturing the excess heat, CHP uses heat that would be wasted in a conventional power plant, potentially reaching an efficiency of up to 80% for the best conventional plants. This means that less fuel needs to be consumed to produce the same amount of useful energy.

The U.S. Department of Energy (DOE) has an aggressive goal of having CHP comprise of 20% of the US generation capacity by the year 2030. Outside of the United States, energy recycling is more common. Denmark is probably the most active energy recycler, obtaining about 55% of its energy from cogeneration and waste heat recovery.  The high cost of electricity and the pressing requirement for alternate clean power sources in the E.U. (led by recent legislation such as RED and ESD) have forced industries to examine combined heat and power (CHP) technology as an option. 

CHP provides many benefits including increased energy efficiency, operating cost savings, and reduced air pollution and greenhouse gas emissions. There are additional benefits for the host-company including increased reliability, power quality, and higher productivity. The electric power industry and its customers can also benefit when industrial CHP capacity is used to support and optimize the overall power grid.

All around the world, the ability to produce and use both heat and electricity from the same fuel source provides tremendous efficiency and with recent legislative actions, new avenues and market opportunities are opening for CHP.  GSE views this as a timely market opportunity and will target this sector moving forward.