The invention is directed to a high efficiency cogeneration system capable of creating electricity and usable heat. The invention includes a fuel source, which can be a reservoir filled with a fossil fuel. The fuel source feeds a modified combustion engine that can turn a shaft to power an alternator to create electricity. The combustion engine creates hot gases that are treated by a catalytic converter. The preferred catalyst contemplated by the invention includes palladium and platinum. The byproduct and hot gases are then fed into one or more cooling manifolds which act as heat exchangers.