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In thermal power stations, mechanical power is produced by a heat engine, which transforms thermal energy, often from combustion of a fuel, into rotational energy. Most thermal power stations produce steam, and these are sometimes called steam power stations. Not all thermal energy can be transformed to mechanical power, according to the second law of thermodynamics. Therefore, there is always heat lost to the environment. If this loss is employed as useful heat, for industrial processes or district heating, the power plant is referred to as a cogeneration power plant or CHP (combined heat-and-power) plant. In countries where district heating is common, there are dedicated heat plants called heat-only boiler stations. An important class of power stations in the Middle East uses byproduct heat for desalination of water.

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