Combined heat and power (CHP) has huge potential to deliver energy savings and emissions reductions, and in many cases cost reductions too. But the market and regulatory framework is the key to delivering large-scale installations, and government has a poor record in delivering an appropriate framework. Technology is central to the future competitiveness and therefore uptake of CHP. It could lead to more efficient CHP electricity generation, permit the use of lower-carbon, renewable fuels, and enable the development of new products for new end uses, including micro-CHP and CHP in heat networks. The market for CHP has been difficult in the past few years, largely as a result of government market reforms. The UK's level of CHP skills, for installing current technologies and developing new ones, is low. The key issue is the creation of the right market framework to deliver CHP, and part of this is support for the energy services approach. (C) 2008 Queen's Printer and Controller of HMSO. Published by Elsevier Ltd. All rights reserved.