Power is energy per unit time. The power output or capacity of an electric plant can be expressed in units of megawatts electric (MWe). The electric efficiency of a conventional thermal power plant, considered as saleable energy (in MWe) produced at the plant busbars as a percent of the heating value of the fuel consumed, is typically 33% to 48% efficient. This efficiency is limited as all heat engines are governed by the laws of thermodynamics (See: Carnot cycle). The rest of the energy must leave the plant in the form of heat. This waste heat can go through a condenser and be disposed of with cooling water or in cooling towers. If the waste heat is instead utilized for district heating, it is called cogeneration. An important class of thermal power station are associated with desalination facilities; these are typically found in desert countries with large supplies of natural gas and in these plants, freshwater production and electricity are equally important co-products.

Since the efficiency of the plant is fundamentally limited by the ratio of the absolute temperatures of the steam at turbine input and output, efficiency improvements require use of higher temperature, and therefore higher pressure, steam. Historically, other working fluids such as mercury have been experimentally used in a mercury vapour turbine power plant, since these can attain higher temperatures than water at lower working pressures. However, the obvious hazards of toxicity, and poor heat transfer properties, have ruled out mercury as a working fluid.