Cogeneration has been known since inventor Thomas Edison applied the idea in 1882 in the first U.S. power plant. The process uses a by-product of electricity to also provide heating. It was only quite recently that the U.S. government and environmental groups embraced this and other integrated energy systems as one of the best ways of improving energy efficiency and reducing air pollution. Cogeneration and trigeneration, which includes also cooling, reduce energy costs and improve power reliability and quality.

Currently used to power some commercial buildings and industrial facilities, these systems convert 80 to 85 percent of fuel's energy content into usable energy, compared to 50 percent at conventional thermoelectric stations and only 33 percent for power generation in general, according to the Midwest Cogeneration Application Center. Increased efficiency of energy utilization reduces the amount of fossil fuels consumed per unit of energy used, cutting by 45 percent air emissions that would come from conventional power plants.

Yet the concepts of combined cooling, heating, and power (CCHP) generation, as trigeneration is known, and combined heat and power (CHP) generation, as cogeneration is known, have failed to create the same excitement and interest as, say, hybrid cars. The share of power generation from integrated systems and renewables in the global market has increased only slightly, going from 7 percent in 2002 to 7.2 percent in 2005, according to a survey by the World Alliance for Decentralized Energy (WADE).

WADE blames this slow growth on "persistent" regulatory barriers and the high prices of natural gas, the second most used fuel in the integrated systems after coal. Some experts, however, argue that the lack of one-stop shopping for the integrated systems and the incompatibility among parts from different manufacturers have hampered the expansion.

A cogeneration system consists of an engine, turbine, or fuel cell that generates on-site electricity, and a heat recovery unit that captures waste heat from the generation process. In commercial buildings, cogeneration systems are usually connected to an absorption chiller that provides heating and cooling for the central heating, ventilation, and air conditioning systems.

Experts predict a more positive outlook for cogeneration in coming years, thanks to standardized parts and preassembled modular systems. According to David Engle, a writer specializing in construction topics, the new generation of cogeneration systems will transform the integrated energy industry and broaden the potential customer base to hospitals, nursing homes, data centers, food-processing plants, supermarkets, warehouses, hotels, and educational facilities. Facility operating costs will dive as equipment prices drop and energy efficiency rises, he says in a 2005 article published by the journal Distributed Energy.

WADE believes that growth potential in emerging markets is greater than prospects in the developed world. In India alone, integrated systems have the potential to cogenerate enough electricity from by-products of sugar-cane processing to become a major player in satisfying that country's growing demand for electricity, according to Winrock International, a nongovernmental organization that works on natural resource and environmental issues. And in Brazil, new gas discoveries off the southeast coast, coupled with relatively new regulatory incentives, provide opportunities for cogeneration investment in São Paulo and Rio de Janeiro, according to WADE.

WADE says that future market prospects for cogeneration everywhere depend on removing regulatory barriers in the electricity market and creating a level playing field for all forms of electricity generation.