Thermal power plant is a power plant in which the prime mover is steam driven. Water is heated, turns into steam and spins a steam turbine which either drives an electrical generator or does some other work, like ship propulsion. After it passes through the turbine, the steam is condensed in a condenser and recycled to where it was heated; this is known as a Rankine cycle. The greatest variation in the design of thermal power plant is due to the different fuel sources. Some prefer to use the term energy center because such facilities convert forms of heat energy into electrical energy.

Almost all coal, nuclear, geothermal, solar thermal electric, and waste incineration plants, as well as many natural gas power plants are thermal. Natural gas is frequently combusted in gas turbines as well as boilers. The waste heat from a gas turbine can be used to raise steam, in a combined cycle plant that improves overall efficiency. Power plants burning coal, oil, or natural gas are often referred to collectively as fossil-fuel power plants. Some biomass-fueled thermal power plants have appeared also. Non-nuclear thermal power plants, particularly fossil-fueled plants, which do not use cogeneration are sometimes referred to as conventional power plants.

Commercial electric utility power stations are most usually constructed on a very large scale and designed for continuous operation. Electric power plants typically use three-phase or individual-phase electrical generators to produce alternating current (AC) electric power at a frequency of 50 Hz or 60 Hz (hertz, which is an AC sine wave per second) depending on its location in the world. Other large companies or institutions may have their own usually smaller power plants to supply heating or electricity to their facilities, especially if heat or steam is created anyway for other purposes. Shipboard steam-driven power plants have been used in various large ships in the past, but these days are used most often in large naval ships. Such shipboard power plants are general lower power capacity than full-size electric company plants, but otherwise have many similarities except that typically the main steam turbines mechanically turn the propulsion propellers, either through reduction gears or directly by the same shaft. The steam power plants in such ships also provide steam to separate smaller turbines driving electric generators to supply electricity in the ship. Shipboard steam power plants can be either conventional or nuclear; the shipboard nuclear plants are mostly in the navy. There have been perhaps about a dozen turbo-electric ships in which a steam-driven turbine drives an electric generator which powers an electric motor for propulsion.

In some industrial, large institutional facilities, or other populated areas, there are combined heat and power (CHP) plants, often called cogeneration plants, which produce both power and heat for facility or district heating or industrial applications. AC electrical power can be stepped up to very high voltages for long distance transmission with minimal loss of power. Steam and hot water lose energy when piped over substantial distance, so carrying heat energy by steam or hot water is often only worthwhile within a local area or facility, such as steam distribution for a ship or industrial facility or hot water distribution in a local municipality.