Co-generation (CHP) is the combined production of electrical and thermal energy. Co-generation is widely used in buildings with permanent demand for power such as hospitals or for block heating of residential areas.
CHP plants with a gas-fired or oil-fired combustion engine or a gas turbine are mainly used for this purpose.

The advantage of co-generation plants as compared to the separate generation of electricity and heat is their high energy efficiency and, hence, lower CO2 emissions.
The simultaneous generation of heat and electricity near the place of consumption enables a high overall efficiency as it covers not only the heating and hot water requirements but also a major portion of the local power demand.

Micro CHP plants for private homes and small businesses have not been widely accepted yet.