A CHP scheme is considered to replace an existing system for the supply of electricity and heat loads of a factory. The existing system consists of purchasing electricity (40 kW) from the main board (generating plants have efficiency of 40%) and the heating load (120 kW) is obtained using a boiler with 80% efficiency. The CHP scheme uses a gas turbine to supply the electricity and part of the heating load. The remaining part of the heat load will be supplied by the existing boiler with efficiency of 80%. The efficiency of the gas turbine is 20% and the efficiency of the waste heat exchanger is 66.66%. The thermal efficiency of the CHP scheme and that of the existing scheme are: (1) (2) 80% and 66.66% 75% and 66.66% (3) 75% and 40% (4) 40% and 60%