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.