Change of market principles and European Union environmental targets leads to more cycling operations of combined cycle units, which used to operate in baseload regime. Due to generation imbalanced allocation, which mainly provoked by intermitting generation, power network becomes less stable. As a result, new requirements for generator connection in Europe were developed, challenging existing power plants to fulfill them. All this leads to higher operational costs of combined heat and power plants and solutions must be found to reduce costs and/or increase revenue. Cycling operation negative impact on power plant thermal equipment is well studied. This Doctoral Thesis reviews the cycling operation impact on combined heat and power plant main electrical equipment and provides empirical formulas to evaluate reliability for different operation scenarios. Solutions for power plant modernisations to fulfill new requirements and provide ancillary services are analyzed. Possible costs of ancillary service provision from combined heat and power plants as well as sites connected to transmission system are evaluated, providing information for further calculations. Detailed methodology of solar generated energy applicability for self-consumption needs was developed, which allows to choose the right power of installation to make the fastest payback time. A battery storage optimization methodology was developed to reduce self-consumption costs of power plant interacting with the solar generation or operating separately. The methodology for combined heat and power plant operation planning enhancement was developed, which use gain from ancillary service provision to move startup’s back in time or shutdowns further in future to provide highest revenue. Methodology also allows to use additional profit to grant lowest number of startup’s per year. Results of both approaches are used to make incident rate calculations by developed empirical formulas, which allow to choose optimal strategy for power plant operation. Obtained formulas can be easily used for most combined heat and power plants. Developed methodologies can be used to optimize the self-consumption of any applications. Methodology for power plant operation planning enhancement is applicable to various scenarios. All developed methodologies were tested on historical data. The results of analysis of ancillary service provision remuneration impact on combined heat and power plant main electrical equipment incident rate and possible income should lead to new researches in this area.