Cogeneration is an efficient way of producing electricity, heat and, in some cases, cooling.

Traditional power generation systems waste a large portion of the energy that is released by the combustion of fuel. Energy losses typically occur via the exhaust gas combustion, through the steam condensing system, and out of the various cooling systems.

Cogeneration systems recover heat from those energy loss pathways and put that heat to good use. This is typically by providing heat or hot water to a nearby property or properties.

Cogeneration has wide appeal because most buildings need what cogeneration systems can provide—electricity, heat, and cooling.

Installing a cogeneration system can reduce a building’s carbon footprint, enhance the reliability of its electric supply, and, crucially, save money. More broadly, the wide adoption of cogeneration provides benefits to the broader community. These benefits are enhancing the community’s energy security and making its energy infrastructure more resilient.

Environmental concerns motivate many cogeneration projects.

Traditional fossil-fuel-burning power plants waste between 70% and 40% of the energy that they consume to produce electricity. By recovering much of that waste energy, cogeneration systems remove the need to burn additional fuel for heating purposes. This saves energy and reduces emissions of carbon dioxide (CO₂) and other pollutants.

For many organizations, investing in a cogeneration system is a smart and cost-effective step towards meeting environmental commitments.

Various programs, such as the LEED rating system, are available to independently assess and certify progress made in that regard. Additionally, incentives exist at the local, regional, and national level. These incentives reward those who invest in a cogeneration system for their contribution to environmental sustainability. In the United States, for example, a 10% federal tax credit is available to the owners of qualifying systems. This incentivization often shifts the return on investment of a cogeneration system from good to great.

Cogeneration users who can produce their own fuel on site for use in the cogeneration equipment can save even more energy.

Many industrial processes generate a combustible by-product. This by-product can be burned in a boiler or a power generator to produce electricity and heat. Wastewater treatment facilities, for example, can generate large quantities of methane-bearing gas from the fermentation of sewage sludge. Rather than flare that valuable gas, many facility owners have chosen to use it to fuel a cogeneration system. These facilities are thus able to power their electrical equipment and heat their fermentation pools very cheaply.