Explanation:

? Cogeneration (Combined Heat and Power or CHP) is the simultaneous production of electricity and heat, both of which are used.

? Cogeneration therefore offers energy savings ranging between 15-40% when compared against the supply of electricity and heat from conventional power stations and boilers. Cogeneration optimises the energy supply to all types of consumers, with the following benefits for both users and society at large:

o Increased efficiency of energy conversion and use. Cogeneration is the most effective and efficient form of power generation.

o Lower emissions to the environment, in particular of CO2, the main greenhouse gas. o Large cost savings, providing additional competitiveness for industrial and commercial users, and offering affordable heat for domestic users.

o An opportunity to move towards more decentralised forms of electricity generation, where plants are designed to meet the needs of local consumers, providing high efficiency, avoiding transmission losses and increasing flexibility of system use. This will particularly be the case if natural gas is the energy carrier.

o Improved local and general security of supply – local generation, through cogeneration, can reduce the risk of consumers being left without supplies of electricity and/or heating. In addition, the reduced need for fuel resulting from cogeneration reduces import dependency.

o An opportunity to increase the diversity of generation plant, and provide competition in generation. Cogeneration provides one of the most important vehicles for promoting energy martket liberalisation. Increased employment – a number of studies have now concluded that the development of CHP systems is a generator of jobs.