Combined Heat and Power or
CHP is
power generation method which aims to extract the maximum energy from a
fuel source.
Power plants of this type
burn a fuel to power an
engine (usually a
gas turbine) which in turn is used to drive an
alternator and produce
electricity.
The innovation in this process stems from the additional use of the waste heat from the gas turbine.
This waste heat is often used to provide domestic heating or hot water for industrial processes and for this reason, CHP power plants are being used increasingly to service smaller urban conurbations which may be a considerable distance from a conventional power station.
A further advantage of CHP is the great flexibility in potential size and power output (gas turbines are available in sizes ranging from 100kw to 500,000+). This has even lead to some uses to service single dwellings as a replacement for conventional generators and central heating boilers.
While this type of power generation method inevitably consumes fossil fuels and is not inherently sustainable, gas turbines are flexible and fuel tolerant devices, and have successfully been used to burn fuels such as pulverized coal dust and sustainably farmed wood chippings in addition to the more usual liquid and gaseous hydrocarbons.
Footnote
I even tried this myself using a tiny gas turbine (ex-auxiliary power unit from an airliner) which is not much bigger than a football, hooked up to a number of old automobile alternators. While it made useful electricity (the heat usage was going to come later), the shattering noise it made caused neighbours considerable dismay and the project was abandoned. However, gas turbines are exceptional fun to play with.