Combined heat and power (CHP) refers to the use of a production unit's exhaust heat for another process requirement, improving energy utilization. By capturing waste heat, overall thermal efficiency can increase from 40-50% to 70-90%. CHP installations can be large or small, using fuels like natural gas or biomass, and are used for industrial steam production, agriculture heating, district heating, and small-scale building heating. CHP provides benefits like high efficiency, reduced emissions, cost savings, and power reliability.