A thermal demand priority type cogeneration system, is made operative for obtaining power output without thermal demand. When the temperature in a hot water tank 17 is low, a heat request is output from a heat request generator 42 and thereby an engine 11 is driven. When the temperature T higher than a predetermined temperature T1, a first water supply instructing unit 44 opens a valve 39 and supplies water to the tank 17 to decrease the water temperature T. When the water temperature goes down, thermal demand is generated, the engine 11 is driven according to the heat request. So as to generate thermal demand, a discharge valve 41 may be opened when the water temperature T is at the predetermined temperature or higher. A second water supply instructing unit 46 opens the valve 39 when reserved water level in the tank 17 goes down. When the valve 39 is opened, water is supplied and the water temperature goes down and thermal demand is generated. At a power failure of a commercial electric power system 14, thermal demand is generated forcibly.