Cogeneration or combined heat and power (CHP) is the use of a heat engine or power station to generate electricity and useful heat at the same time. Cogeneration provides on-site, reliable standby power, reduces energy costs by 40-60% and peak demand charges, provides a long-term physical hedge against rising utility costs, improves power quality, extends the equipment life of surrounding equipment, provides substantial federal and state incentives, and helps reduce your business’ carbon footprint.