The working principle of the organic Rankine cycle is the same as that of the Rankine cycle: the working fluid is pumped to a boiler where it is evaporated, passed through an expansion device (turbine, screw, scroll, or other expander), and then through a condenser heat exchanger where it is finally re-condensed.

Organic Rankine cycle (ORC) machines are used to convert low-temperature heat resources into power. Examples include systems making use of waste heat in a cogeneration system, low temperature geothermal electricity generation, solar ponds, and potentially OTEC.

A real Rankine cycle or non-ideal cycle used in actual power plants do not undergo isentropic compression and expansion by pump and turbine respectively. These processes are irreversible compared to the ideal cycle, and there is an increase in entropy as shown in the T-s diagram below.

The Organic Rankine Cycle's principle is based on a turbogenerator working as a conventional steam turbine to transform thermal energy into mechanical energy and finally into electric energy through an electrical generator.