Waste heat is by necessity produced both by machines that do work and in other processes that use energy, for example in a refrigerator warming the room air or a combustion engine releasing heat into the environment. The need for many systems to reject heat as a by-product of their operation is fundamental to the laws of thermodynamics. Waste heat has lower utility (or in thermodynamics lexicon a lower exergy or higher entropy) than the original energy source. Sources of waste heat include all manner of human activities, natural systems, and all organisms. Rejection of unneeded cold (as from a heat pump) is also a form of waste heat (i.e. the medium has heat, but at a lower temperature than is considered warm).
Instead of being "wasted" by release into the ambient environment, sometimes waste heat (or cold) can be utilized by another process (such as using hot engine coolant to heat a vehicle), or a portion of heat that would otherwise be wasted can be reused in the same process if make-up heat is added to the system (as with heat recovery ventilation in a building).
Thermal energy storage, which includes technologies both for short- and long-term retention of heat or cold, can create or improve the utility of waste heat (or cold). One example is waste heat from air conditioning machinery stored in a buffer tank to aid in night time heating. Another is seasonal thermal energy storage (STES) at a foundry in Sweden. The heat is stored in the bedrock surrounding a cluster of heat exchanger equipped boreholes, and is used for space heating in an adjacent factory as needed, even months later. An example of using STES to utilize natural waste heat is the Drake Landing Solar Community in Alberta, Canada, which, by using a cluster of boreholes in bedrock for interseasonal heat storage, obtains 97 percent of its year-round heat from solar thermal collectors on the garage roofs. Another STES application is storing winter cold underground, for summer air conditioning.
On a biological scale, all organisms reject waste heat as part of their metabolic processes, and will die if the ambient temperature is too high to allow this.