Efficient energy usage through cogeneration: The co-generation process produces both electricity and heat (hot water or steam) at the same time. It is much more efficient than a single-purpose generating system because it extracts much more usable energy from the same fuel.
In the most common form of utility type electric generation, fossil fuels are burned in a boiler to heat water. The steam produced by this process drives a turbine attached to an electric generator, which converts this energy into electricity. The excess heat is usually released into the atmosphere via stacks or cooling towers, or into a river or lake. As a result, much of the energy contained in the fuel source is wasted. With co-generation, the excess heat is captured for use in an existing heating and cooling system. The overall efficiency improves when the thermal energy from exhaust is used to heat and cool buildings. This heat or thermal potential can also be used as process heat when needed in manufacturing, which will increase fuel use efficiency even more.