Mathematical modelling and optimisation of the Distributed Energy Supply System (DESS) using natural gas, both at the building level and the overall energy supply network level was carried out for three types of micro-combined heat and power (micro-CHP) - solid oxide fuel cells, Stirling engines, internal combustion engines - and for two different operating strategies - cost-driven and primary energy-driven. The modelling framework captures the overall impact of the adoption of micro-CHP systems on the total primary energy usage in both generation and distribution. A detailed case study on the UK domestic energy supply was undertaken by applying both operating strategies to four different sizes of houses. The best technology selected in each case was evaluated in terms of the economics, total primary energy consumption, and reduction of central power generation requirement. It was shown that the primary energy consumption driven option selected technologies which could potentially achieve 6-10% reduction of total primary energy use compared to the base case where micro-CHP was not adopted, which is nearly two times the reduction by the cost-driven strategy. (C) 2013 Elsevier Ltd. All rights reserved.