In those areas not serviced by a main electricity grid, locally generated electricity is ideally suited as a cost-effective way of meeting the local electricity demand while reducing significant network installation or upgrade costs. Through supply of energy directly at the load with a captive power plant, it is also possible to reduce or avoid altogether the transport and distribution losses. Producing electricity from gas is highly efficient and losses reduction is of paramount importance. Gas engines are well suited to operation in island mode situations.
Cogeneration or combined heat and power (CHP) can also be used in remote areas. Cogeneration is the simultaneous production of electricity and thermal energy from a single fuel source. A reciprocating gas engine is used to drive a generator to produce electricity, the waste heat from the engine exhaust can also be recovered and provided directly to the customer or used in a boiler to produce steam. This enables the supply of electricity and steam or heat to customers.