Cogeneration is a somewhat general term that applies to a number of processes or systems. Cogeneration is probably best defined as the simultaneous production of electricity and heat, or useful mechanical work, from the same fuel source. It is a recognized and accepted means of achieving significant savings in energy costs by maximizing the use of energy in a building. Typically, cogeneration systems operate at an overall system efficiency of 70 to 80 percent. This compares favorably with large central steam power plants with overall efficiencies of 30 to 35 percent. A cogeneration system utilizes energy more efficiently than the utility company for two reasons. First, the cogenerator uses heat as well as electricity from the same fuel source; second, there is less electric power transmission loss. The high operating efficiency of a cogeneration system provides a great savings in energy costs.