This dissertation proposes a computational technique for automated "invention" of conceptual schemes of thermal systems. The input provided to the automated problem solver is a description of the streams entering and leaving the system. The output is a network of elementary processes: compression, expansion, heating, cooling, and chemical processes. The problem solver seeks a network that is feasible, and offers an optimal (or at least favorable) combination of energy and capital costs. The synthesis process is modeled as a heuristic search conducted in a state-space of all possible design versions. The main ideas of the dissertation have been implemented in a computer program called TED, which invented a number of nontrivial schemes. TED starts with an initial state (or states), which may be either proposed by the user or generated automatically. TED evaluates each state using a special technique of exergy analysis applied to an infinitesimal temperature interval. This allows us to...