Simplifying, cogeneration is based on the principle that in a thermoelectric power plant not all the energy introduced with the fuel is converted into electricity: a considerable part of this energy is dissipated in the environment, in the form of "waste" heat.
On the other hand, cogeneration works by recovering most of this "waste" thermal energy, greatly increasing the efficiency in the use of energy sources.
The same principle can also be applied in reverse: many industries use high temperature heat in their production processes and dissipate large amounts of heat into the environment. By recovering this “waste” heat from an industrial cycle, it is possible to generate electricity without having to burn other fuel.
The sizes of a cogeneration plant can vary from a few electric kW of power, for example for applications in the residential sector, to hundreds of electric MW for use in large industry and in thermoelectric power plants with district heating.