ESDU 89001 shows how the techniques of process integration introduced in ESDU 87030, where they were used to optimise heat exchanger networks, can be extended to design optimally the heat and power systems of a process plant or site. After briefly describing the thermodynamic principles of heating and cooling systems, the various types of heat engines and heat pumps that may be used are introduced, and criteria for their selection to achieve an optimal heat and power system are explained. Heat engines include steam and gas turbines and diesel engines, while heat pumps cover thermal and mechanical vapour recompression, refrigeration cycles and heat transformers. The optimisation process covers not only the selection of an appropriate type of utility of the correct size, but also its placement in the process. The application of the techniques and further case studies using current economic and numerical data extend the user's appreciation of the methods.