Various methods of heat generation including cogeneration, district heating, and several types of individual heaters are considered together with a variety of fuels. Performance characteristics for these systems, including fuel use, and thermal and exergetic efficiency are evaluated. Specifically, a complex thermodynamic model of the cogeneration system is presented. In this model the conditions of the surroundings vary with the surroundings temperature. Calculated efficiencies include losses in all components from the sources to the consumer (i.e. in the boiler, the turbine, the heat exchangers, and the whole transmitting network). Exergetic efficiencies vary from as low as 3% for electric heaters to more than 14% for large cogeneration plants. This result places the cogeneration systems as the most effective technology for heating. This technology produces the biggest fuel savings (four times less than for electric heating), and is therefore more environmentally friendly.