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.

The Rankine cycle is an idealized thermodynamic cycle of a heat engine that converts heat into mechanical work while undergoing phase change. The thermal efficiency equals 1 minus the ratio of the low-to-high pressures to the power of 1 minus the reciprocal of the heat capacity ratio.

T–s diagram of a typical Rankine cycle operating between pressures of 0.06 bar and 50 bar. Left from the bell-shaped curve is liquid, right from it is gas, and under it is saturated liquid–vapour equilibrium. There are four processes in the Rankine cycle.

An organic Rankine cycle (ORC), is fundamentally the same as a steam Rankine cycle; however, it uses a lower boiling point organic fluid to better match its operation to lower temperature heat sources. ORC systems can achieve better efficiencies than steam turbines for smaller systems (less than a few MW_e).