Lots of Wasted Energy
EIA has similar flowcharts similar to this on their website for all parts of the energy system. To see this flowchart effectively, you may have to open it up in a new window by right-clicking on it. While a little out of date, the numbers are still fairly close to what is used today in 2007 (we use over 100 Quads now), and the ratios are very close. In case you have forgotten, one Quad represents one quadrillion BTUs or British Thermal Units--a unit of energy that is so arcane that even the British no longer use it, but we Americans seem bound to it forever. For completeness, a BTU is the amount of heat required to raise the temperature of one pound of water from 60 degrees Fahrenheit to 61 degrees. Arcane, indeed, but we need not go there.
The numbers are staggering. In the electric system, close to 70% of the energy is lost to waste heat. In the transportation system, which dominated by petroleum, the loss is closer to 80%. The size of the numbers makes sense if you think about it. Most of the energy used by your car goes away in heat from the engine, and only about 20% is converted into making the car and its contents move. (Critics like Amory Lovins go even further and point out that most of that useful power is used to move the car and not the people in the car, and so the amount lost is 90-99%.) In the electric system, about 60-63% is lost to waste heat, and the bulk of the remainder (7-10%) is lost in transmission.
There are ways to capture most of this wasted energy. It is hard to use it to make more power, for you are fighting the 2nd Law of Thermodynamics (entropy). However, if what you want is the heat instead of the power, then you are in business.
If you look at how we use fossil fuels, a large fraction goes to heat: space heat, water heat, dryer heat, oven heat, etc. The way we traditionally do it, however, doesn't make a lot of sense (or, at least not any more). We burn coal at the power plant to make electricity, and the excess heat goes up the stack or into the cooling pond. We then take that power off the grid and start up the oven or the dryer. Further, we burn heating oil or natural gas in the furnace or boiler to heat the water or the house.
What if we were to take to power plant and put it in the basement? That is the idea of combined heat and power or cogen units. Instead of one big electric plant powering hundreds of sites, we distribute the generation out to the places where it is used. The excess heat is also used locally in other processes instead of being dispersed into the atmosphere, streams, lakes and oceans. We are about to do just that in our house. More details to follow as the cogen unit gets installed.