Cogeneration. Cogeneration is the merging of a system designed to produce electric power and a system used for producing industrial heat and steam. Cogeneration accounted for 75 percent of all non-utility power generation in 1995. This system is a more efficient way of using energy inputs and allows the recovery of otherwise wasted thermal energy for use in an industrial process. Cogeneration technologies are classified as "topping cycle" and "bottoming cycle" systems, depending on whether electrical (topping cycle) or thermal (bottoming cycle) energy is derived first.
Most cogeneration systems use a topping cycle. Facilities that co-generate may be eligible for QF status under PURPA. To qualify, the facility must produce electric energy and "another form of useful thermal energy through sequential use of energy," and meet certain ownership, operating, and efficiency criteria established by FERC (See 18 CFR Part 292). In a topping cycle system, the fuel is used to generate power with a steam boiler or gas turbine cycle combustor. The waste heat from the power generation process is then used in an industrial process.