Combined heat/power plant © Erhorn-Kluttig et al., 2011

Cogeneration (CHP) is a concept with high returns. If large or small cogeneration plants can be installed in or nearby cities, they can realise a return greater than 90% by using both the electricity and the heat created during the process. Coal-, oil- and gas-fired power plants built far from cities often have a return of only 35-40% because due to the great distance to industry and cities the heat cannot be used efficiently or at all.

Various fuels can be used for cogeneration systems, as shown in the above drawing: both fossil and renewable fuels and also waste products. Larger or smaller cogeneration plants are used mostly for the heat production of district and urban heating systems.

Cogeneration systems are available from 1 to 40,000 kW. The cost per kW varies from 250 euros/kW for large systems to 3100 euros/kW for small systems Erhorn-Kluttig et al., 2011. In recent years micro- and mini-cogeneration and gas compression heat pumps have also been developed.