Cogeneration is a method of energy conservation used in power plants where two types of energy are harnessed from a single power plant. It has proved to be economically and environmentally friendly and is ideal for process industries such as pharmaceutical, textile, biomass, and chemical industries.
Typically a power plant will produce electricity and steam or hot water. Ideally, the steam or hot water should be utilised nearby so that energy is not lost during transport. Using cogeneration, power generation companies in India are able to capture up to 90 per cent of energy as compared to the 30 per cent energy efficiency they were experiencing without using cogeneration. Another benefit of cogeneration is reduced carbon emissions. With this technique of energy conservation, power plants are able to produce double the energy output, using only a single energy source. Cogeneration creates a two-for-one energy production deal.
Industrial cogeneration makes for an excellent solution for companies in different sectors which focus great attention not only on the quality and excellence of their own products but also on economic savings, energy efficiency and environmental protection.
Additionally, cogeneration has the following benefits for both users and society as a whole:
1.Increased efficiency of energy conversion and use. It is the most effective and efficient form of power generation.
2.Lower harmful emissions to the environment, till 50 per cent of CO2 in particular, which is the main greenhouse gas.
3.Enormous cost savings, offering additional competitiveness for industrial and commercial users along with affordable heat for domestic users.
4.An opportunity to switch to more decentralised forms of electricity generation. This includes plants that are designed to meet the needs of local consumers, providing high efficiency, avoiding transmission losses, and increasing the flexibility of system use.
5. Better local and general security of supply.  Local energy generation, using cogeneration, has the potential to reduce the risk of consumers being deprived of electricity supply and/or heating. Cogeneration also reduces import dependency which impacts overall non-renewable energy reserves.
6. An opportunity to increase the diversity of the power generation plant, and provide competition in generation. Cogeneration has been among the most important vehicles for promoting the liberalisation of the energy market.
A large number of power plants are adopting cogeneration as an important energy conservation technique owing to the numerous benefits this safe, environmentally friendly method offers.