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What is cogeneration and what are its benefits?

Cogeneration, or combined heat and power (CHP), is a system that produces heat and electricity simultaneously in a single plant, powered by just one primary energy source, thereby guaranteeing a better energy yield than would be possible to achieve from two separate production sources. In this way, nearly all the thermal energy produced by combustion processes is not dissipated into the environment, as happens with traditional plants, but is recovered and reused. The most widely used cogeneration technologies involve the combustion of fuels such as natural gas, GPL, diesel, biogas, bio-methane, vegetable oil or biomass.

How do cogeneration systems work?

Conventional power plants generate electricity by heating water to the boiling point, thereby producing steam to drive a turbine that creates kinetic energy needed for electricity. The water is usually heated by using a fossil fuel like coal, oil, or natural gas. Energy is wasted in every step of this process, particularly because the heat generated to create steam is simply released into the atmosphere. Some 60% of energy can be wasted during traditional electricity generation. This means that energy efficiency runs at about 30%, because some of the energy dissipates during transmission. Instead, a cogeneration plant captures and uses this heat by, say, piping the hot water and suppliers it to a consumer (be it a factory or a group of buildings). This is one of the main benefits of cogeneration, as it leads to higher energy efficiency up to 70-90% of generated energy is used - with only 10-30% of the energy produced being wasted.
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Infographic about cogeneration system

What are the different types of cogeneration?

There are different types of cogeneration, including:

  • Gas turbine powered: these systems use the waste heat in the flue gas of gas turbines to generate energy; typically they use natural gas as a source of fuel;

  • Gas engine powered: in this cogeneration process, a reciprocating gas engine is used. These types of CHP cogeneration plants are usually manufactured as fully packaged units that can be installed inside a dedicated plant room or in a dedicated external space and are easy to connect to the site’s heating and electric infrastructure;

  • Biofuel engine: these systems are very similar to the previous ones, in that they use a reciprocating gas or diesel engine adapted to using biofuel as a source of fuel. Using biofuels reduces fossil fuel consumption and leads to reduced carbon emissions. These plants also generally come in assembled units that are easy to plug into existing heating and power infrastructure;

  • Steam turbine CHP: this system uses the heating system as the steam condenser for the steam turbine.


Some cogeneration plants use biomass derived from industrial and municipal solid waste as fuel, and are therefore called biomass cogeneration systems.

What is meant by high-efficiency cogeneration?

The concept of “high-efficiency cogeneration” has been defined by the European Union with directive 2012/27/EU, which replaced previous Directive 2004/8 EC. According to the latest directive “‘high-efficiency cogeneration” high-efficiency cogeneration shall fulfil the following criteria:

  • Cogeneration production from cogeneration units shall provide primary energy savings calculated according to point (b) of at least 10 % compared with the references for separate production of heat and electricity;

  • Production from small-scale and micro-cogeneration units providing primary energy savings may qualify as high-efficiency cogeneration.

What are the benefits of cogeneration?

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A cogeneration system can deliver significant benefits for commercial and industrial (C&I) customers, because it produces heat and electricity at the same time. Using the same fuel to generate both heat and electricity therefore improves energy efficiency, delivers environmental benefits and ensures savings. Cogeneration power plants generally operate at between 50 to 70% higher efficiency rates than traditional power plants. The European Union has incorporated cogeneration into its energy policy aimed at reducing greenhouse gases and becoming carbon neutral by 2050. Cogeneration accounted for 12% of Europe’s electricity production and 14% of its heat in 2019, according to Eurostat figures, and COGEN Europe estimates that number could increase to 20% of electricity and 25% of heat by 2030.
Cogeneration systems can:
  • Improve the overall efficiency of energy usage by combining the production of heat and electric energy in a single generator
  • Reduce energy costs
  • Lower emissions
  • Reduce risks of power cuts due to grid problems
  • Qualify for economic incentives relating to energy efficiency projects
  • Use renewable energy sources like biomass
  • Be adapted to fit the needs of all sorts of users, including residential
  • Reduce reliance on energy grid, since a CHP is usually onsite or nearby
  • Promote energy self sufficiency and reduce energy imports

Main difference between cogeneration and trigeneration

In truth, there isn’t that much difference between a cogeneration process and a trigeneration process. Trigeneration can be considered simply an extension of cogeneration, as it adds one more element to the formula: refrigeration. So, while industrial cogeneration systems capture the heat produced by energy production and channel it back to the consumer as heating, trigeneration systems supply electricity, heat and cooling in the form of cold air or cold water. The cooling process works by way of a cogenerator paired with an absorption refrigerating unit that turns the thermal energy into cooling energy by changing the state of the coolant.

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