With fossil fuel and supply of centralized energy getting more expensive combined electricity and heating production is spreading in the European Union using cogeneration plants. Such distributed energy generation has a range of advantages: a possibility to use local fuel rationally including fuel of biological nature, lower costs of energy production and distribution, lower environmental pollution and creation of new work places in rural areas. The carried aut analysis showed, that good perspectives are forecasted for using diesel engines in cogeneration plants, if they run on plant oil produced locally. The investigations proved that comparative consumption of mineral diesel fuel made 205š1.4 g/kWh, that of rape seed methyl ester - 225š2.6 g/kWh and plant oil - 230š1.8 g/kWh. The analysis of emissions showed that after changing mineral diesel fuel with pure RME or rape seed oil, a larger amount of NOx is emitted into the environment - 10% and 13% respectively. A comparative amount of CO in oxides while using pure RME decreases by 5.7%, compared with mineral diesel fuel, and using rape seed oil - by 6.3%. Economic calculations showed that capital investments for the erection of a cogeneration plant of 340 kW power would make 480 thou Lt. The operation of such plant would give 448.8 thou Lt of annual income for sold electric power and the production cost of produced heating energy would be 0.18 Lt/kWh.