The report describes the available and promising future cogeneration technologies, including their likely costs and operating characteristics, and reviews the potential applications for these technologies in industry, commercial buildings, and rural/agricultural areas. It also describes the technical requirements for interconnecting cogeneration systems with the utility grid, and discusses advanced combustion and conversion technologies (fluidized bed and gasification systems) that will enable cogenerators to use fuels other than oil and natural gas. The analysis of cogenerations market potential focuses on the competitiveness of cogeneration when compared to investments in conservation or in conventional separate thermal and electrical energy systems (e.g., an industrial boiler and a central station utility powerplant). In addition, the report examines the possible effects of the widespread use of cogeneration systems on utilities and their ratepayers, and on air quality.