Combined Heat and Power (CHP) uses energy sources more efficiently, hence cutting down on the overall combustion of fossil fuels and leading to lower emissions into the atmosphere.

Usage of CHP can potentially result in savings of up to 50 percent in terms of carbon dioxide emissions as compared to conventional sources of heat and power.

The use of absorption chillers in CHP, in place of the conventional electric chillers, which utilise chlorofluorocarbons-based refrigerants (CFC), is an additional benefit for the environment.

Distributed generation usually results in better efficiencies in the supply system, which is a result of the lower losses incurred through the transmission and distribution networks. This increases the overall efficiency of the power supply system, while lowering the environmental impact.