About one third of electricity used by the chemical industry is produced onsite, primarily by means of cogeneration. The chemical industry is one of the largest co-generators in the manufacturing sector, second only to pulp and paper mills. Cogeneration can provide competitive advantages over purchased electricity, since thermal efficiencies are much higher and excess electricity can be sold back to the grid. The chemical industry has steadily increased its cogeneration capacity, which has more than doubled since 1985 [CHEM 1992, MECS 1994].