Coal and natural-gas power plants lose as waste heat two-thirds of the energy they produce. Combined-heat-and-power (CHP) systems—what used to be called cogeneration—attain 80 percent efficiency by capturing the heat and using it locally. CHP predates electrical grids in many parts of the world.
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Tiny Denmark is the world leader, getting more than half its power from CHP. The germ of the plan dates to the early 20th century, when the country installed insulated pipes to shunt heat from big CHP plants to particular city districts to heat homes and water. After the oil crises of the 1970s, the Danes again instituted pro-CHP policies, boosting smaller-scale CHP plants in towns, industries, and individual buildings. Similar measures were taken in other EU countries.