Combined heat and power (CHP) is an efficient and clean approach to generate electric power and useful thermal energy from a single fuel source.
CHP is a form of distributed generation, which is located at or near the energy-consuming facility, whereas conventional generation takes place in large centrally-located power plants.
CHP’s higher efficiency comes from recovering the heat normally lost in power generation to provide heating and/or cooling on-site.
CHP’s inherent higher efficiency and elimination of transmission and distribution losses from the central power plant results in reduced primary energy use and lower greenhouse gas (GHG) emissions.

European authorities, with the Energy Efficiency Directive, and North American authorities, with the White House Executive Order to Accelerate Investment in Industrial Energy Efficiency, define cogeneration as one of the most important energy efficiency technologies.